Archives for Newsletter and Updates

Important Tax Figures for 2017

Every year, the dollar amounts allowed for various federal tax benefits are subject to change based on inflation adjustments and legislation. Here are some important tax figures for 2017, compared with 2016, including the estate tax exemption, Social Security wage base, qualified retirement plan and IRA contribution limits, driving deductions, allowable business write-off amounts and more.     The following table provides some important federal tax information for 2017, as compared with 2016. Many of the dollar amounts are unchanged or have changed only slightly due to low inflation. Other amounts are changing due to legislation.   Social Security/ Medicare
Read More

Categories: Newsletter and Updates.

Want Your Estate to Avoid Probate? Six Ways to Make it Happen

Have you taken time recently to think over the issues involved in your estate? One consideration is whether or not you want your estate to go through probate. If you want your heirs to avoid it, there are some steps you can take. This article explains the basics of probate and provides six ways your heirs may be able to skip it. Life is busy. If you’re like most people, you have a long list of things to do. However, it’s critical to make time regularly to consider whether you’ve set up your estate in a way that will result
Read More

Categories: Newsletter and Updates.

Strictly Speaking: Travel and Entertainment Recordkeeping

The IRS takes a strict position on travel and entertainment deductions. If you don’t follow recordkeeping requirements, the tax agency may disallow the sought-after deductions. This article explains the basic rules, lays down some guidelines for providing proper receipts, and delves into a few additional points that both employers and employees will find helpful. If you’re reporting travel and entertainment (T&E) expenses on your tax return and you’re audited, there’s a good chance an agent will take a hard look at those items. Often the challenge won’t be whether the expense was appropriate for the business, but whether your records
Read More

Categories: Newsletter and Updates.

Employee, Partner or Both? Recent Developments Help You Decide

Are you an employee, a partner, a partner who doesn’t know it — or a combination of these classifications? The answer can have serious tax implications. If you participate in a business that’s operated as a partnership or a limited liability company, here are some recent developments that you need to know. IRS Position on Dual Status Longstanding IRS guidance in Revenue Ruling 69-184 states that a partner can’t also be an employee of the same partnership. However, this policy has recently come into question. Some tax experts have been prodding the IRS to allow dual employee/partner status in certain
Read More

Categories: Newsletter and Updates.

Year-End Reminder: Don’t Forget FSAs

The holidays can be a joyous — but hectic — time of year. While you’re juggling shopping for gifts, decorating your home and planning get-togethers with friends and family, it’s easy to forget to spend any remaining funds in your Flexible Spending Accounts (FSAs) before New Year’s Day. However, if you fail to observe the “use-it-or-lose-it rule,” you could forfeit any money left over in your accounts, unless a special provision applies. In addition to spending what’s left of last year’s FSA balance, November is the time of year when you need to decide on the types of spending/savings accounts
Read More

Categories: Newsletter and Updates.

IRS Extends Deadline to Provide 2016 ACA Forms to Recipients

The IRS announced that it is extending one of the deadlines for providing 2016 Affordable Care Act (ACA) information statements to recipients. Specifically, the due date for furnishing to individuals the 2016 Form 1095-B (Health Coverage) and the 2016 Form 1095-C, (Employer-Provided Health Insurance Offer and Coverage) is extended from January 31, 2017, to March 2, 2017. Q&As about the Process and Extended Due Date What about filing these statements with the IRS? Is there an extension? No. The deadline for filing the forms with the IRS is not being extended. The IRS has determined that there’s no similar need
Read More

Categories: Newsletter and Updates.

Spotlight On Business Tax Trends

The Joint Committee on Taxation (JCT) is a nonpartisan Congressional committee that, among other things, assists in the analysis and drafting of proposed federal tax legislation and prepares reports that interpret newly enacted federal tax legislation. The JCT recently issued the Overview of the Federal Tax System as in Effect for 2016. Here are the details of that report, including some interesting trends about business taxes. Background on Business Taxes The federal income tax treatment of a domestic business operation — one that’s domiciled in the United States — depends on how it’s set up. A business’s “choice of entity”
Read More

Categories: Newsletter and Updates.

Giving Gifts to Employees? IRS Wants Its Share

Do you want to be extra-generous to employees who are doing a good job? Bonuses and gifts can be an effective motivational tool, but be aware of all the tax consequences. Usually, employees will face a tax bill for your generosity. Background: Unlike gifts made on a personal level, gifts from an employer to employee (outside the context of employment) are generally taxable to the recipient as supplemental wages. In other words, the gifts are subject to both income tax and employment taxes. The value of the gifts must be reported on the employee’s Form W-2 for that year. In
Read More

Categories: Newsletter and Updates.

Debt or Equity? New Guidance Helps You Decide

Corporations can generally deduct interest on debts for federal tax purposes. A valid obligation exists if the parties intended to create a debt, and the debt is enforceable and unconditional. In contrast, a capital contribution is a direct or indirect contribution of cash or other property to the capital of a business entity. Generally, a contribution to the capital of a corporation isn’t treated as taxable income to the corporation, and the contributor can’t deduct the payment for tax purposes. The issue of whether certain corporate instruments should be classified as debt owed by the corporation or as an equity
Read More

Categories: Newsletter and Updates.

Way for You as a California Shareholder to Save on State Disability Insurance (SDI) (Approx. $1,000)

In California, if you, as a taxpayer, are the 100% shareholder and also an officer of a corporation, you can save up to $998 in 2017 by electing to exclude your wages from the corporation from SDI withholding. The SDI withholding rate for 2017 is 0.9%. The taxable wage limit is $110,902 for each employee per calendar year. Therefore, the maximum withholding for each employee is $998. The taxpayer can claim the exclusion by filing a simple one page statement with the California Employment Development Department (EDD). The exclusion will be effective in the calendar quarter filed. (see www.edd.ca.gov/pdf_pub_ctr/de459.pdf). However,
Read More

Categories: Newsletter and Updates.