JULY 25, 2013
Upcoming Due Dates

 

August 10

 

Employees who work for tips.

 

If you re­ceived $20 or more in tips during July, re­port them to your employer. You can use Form 4070.

 

 

Automatic Gratuities vs Tips  

  

 

September 16

 

3rd quarter estimated tax payments due for the 2013 tax year.

Final deadline to file   

 

Corporate tax returns if an extension was requested.  (Forms 1120, 1120A, 1120S)

 

Trust income tax returns (Forms 1041) if an extension was requested.

 

Partnership tax returns (Forms 1065) if an extension was requested.

 

 

If you have not sent us the information to prepare your income tax returns, please contact us as soon as possible. We want to make sure our clients meet the deadline to avoid any interest or penalty charges imposed for late filings.   

 

 

 

 

 

TAX TIP 
FRINGE BENEFITS
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Fringe benefits may be such an established part of your business compensation package that you're fairly casual about them. Nevertheless, it's wise to review your policies periodically to make sure you're correctly classifying the fringe benefits you provide and getting the maximum tax deduction.

 

For example, say you've been including expenses such as break room coffee and snacks in your "meals and entertainment" general ledger account. The practice could be costing you at year-end. Why?

 

Generally, only 50% of the cost of meals and entertainment expenses are deductible on your federal income tax return. However, office snacks provided to workers on your business premises qualify for 100% deductibility. Separating the expenses makes it easy to determine the proper tax treatment.

 

Health insurance premiums may also require separate accounting. For example, when you own more than 2% of the stock of an S corporation, premiums you pay for your policy must be reported on your Form W-2 at year-end as part of your wages.

 

The health insurance premiums you pay for your employees are generally not included in wages, though they may be reported on Form W-2.

 

Fringe benefits can be a valuable tax break for your business. To be deductible, they must be an ordinary and necessary business expense and meet certain other requirements.

Give us a call. We'll help you untangle the rules.

Administration Delays The Employer Penalty Until 2015

 

 

The Obama administration will not penalize businesses that do not provide health insurance in 2014.  Instead, it will delay enforcement of a major Affordable Care Act requirement that all employers with more than 50 employees provide coverage to their workers until 2015.
 
 

This delay only affects large employer penalty assessments and applicable reporting requirements. It does not affect the employees' access to the premium tax credits available in the Health Insurance Marketplaces (nor any other provision of the PPACA).    Employers and insurers will still need to comply with upcoming 2014 plan design changes and other applicable fees and taxes including the PCOR fee, Transitional Reinsurance Fee and the Heath Insurance Sector Tax (absent other delays).   Health Insurance Marketplaces and the Individual Mandate are also expected to take effect as scheduled (unless further delays are announced).

 

For a link to Treasury's announcement, visit:  http://www.treasury.gov/connect/blog/Pages/Continuing-to-Implement-the-ACA-in-a-Careful-Thoughtful-Manner-.aspx    

 
               

Significant Upcoming Accounting Changes;  

 

(1) Revenue Recognition; (2) Leases; and (3) Financial Instruments.

  

Get ready to tackle some major revisions in accounting standards. After years of consideration, the Financial Accounting Standards Board is finalizing its approaches on three major issues: revenue recognition, leases and financial instruments. Each of these accounting areas affects virtually all companies in the United States no matter what their size or whether they are public or nonpublic. And that means virtually all CPA firms are affected too.

 


Briefly, here is the status of the three pronouncements:
  • Revenue recognition. The new standard is expected to be released this summer. In a significant departure from the current standard, the new revenue recognition standard will not contain industry-specific guidance.   
  • Leases. A revised exposure draft could be released as early as this month. The proposal is expected to require all leases to be on the balance sheet and require that lessees use separate expense recognition for longer-term leases.
  • Financial instruments. This standard is being handled in three parts: credit losses, classification and measurement, and hedging. The first two parts are in exposure into May. Having issued its proposals on hedging in a 2010 exposure draft, deliberations on hedging will resume in the second half of this year, according to the FASB.

Effective dates for the standards generally will not be earlier than reporting periods beginning after Dec. 15, 2016, which would seem to provide reasonable lead time since it's much longer than usual. However, it's important to begin getting ready now. The three revised standards, plus a new standard on insurance contracts, represent the most significant changes to GAAP we've seen in decades.