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What's new with the Affordable Care Act? Here are recent updates.
* Open enrollment. The "open enrollment period" began November 1 for 2016 individual health insurance coverage. Open enrollment is the annual period during which health insurance companies must accept your application regardless of your health history. Once open enrollment is over - January 31, 2016, for 2016 policies - you can only get coverage if you have circumstances that allow you to qualify for a special enrollment period. * Business 1099 filing. "Applicable large employers" are required to give annual information returns regarding health insurance coverage to employees and file copies with the IRS. Applicable large employers are generally those who employed 50 or more full-time employees, including full-time equivalent employees, in the prior year. These forms must be filed in early 2016 for calendar year 2015.
* Household employees. If you currently provide nontaxable health insurance benefits to a nanny or caregiver, you may be able to continue to do so. Generally, amounts you pay for employee health insurance are taxable unless the policy is purchased on the Small Business Health Options exchange. However, employers with only one employee may be exempt from this requirement.
Call me for more information. |
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Are you preparing your business for the "Cadillac" tax? This Affordable Care Act provision is actually named the "Excise Tax On High Cost Employer-Sponsored Health Coverage," and is scheduled to take effect in 2018. Starting that year, this 40% tax will be assessed on the cost of health benefits above a certain threshold. The initial threshold is an annual cost of more than $10,200 for individual plans ($27,500 for a family).
The tax will be due annually and is nondeductible. Who will pay - the insurance company, a third-party provider, or you as the employer - depends on the type of coverage. For example, if you offer employees a group health plan through an insurance company, the insurance company will make the payment. However, under current rules, you're responsible for calculating the amount due.
The IRS is just beginning to release guidance for calculating and reporting the Cadillac tax. Because the tax applies to a wide range of health coverage, you'll need to determine how your business will be affected.
Give me a call for more details. |
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As tax rules proliferate, the thought of planning may seem overwhelming. But there's no rule that says you have to tackle everything at once. Instead, focus on one area at a time. While you'll want to step back when you're finished and make sure you're keeping an eye on the big picture, achieving small goals can be motivating.
For example, you might start by reviewing your investment portfolio. Here are three ideas that can help you save tax dollars at year-end. * Wash sales. If you want to sell a security before December 31 to take advantage of a capital loss, be aware of the wash sale rule. To make sure the loss is deductible, avoid buying a substantially identical security during the 61-day period that begins 30 days before you sell and ends 30 days after. * Worthless stocks. To deduct worthless securities on your 2015 return, you'll need to prove the security became worthless during the year and that it truly has no value. Securities with no value are treated as if you sold them on the last day of the year. Your loss is generally the same as your cost.
* Stock donations. Giving appreciated stock to charity lets you avoid capital gain tax and claim a charitable deduction. However, to deduct the donation on your 2015 return, the gift must be complete. For certificates you endorse and present directly, the date of mailing or other delivery is the completion date. When your broker or the issuing company handles the transaction, the gift is complete when the stock is titled to the charity. Give me a call for more tax planning ideas. |
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Whether or not Congress renews the "extender" tax provision allowing transfers from your IRA to a charity, a year-end review of retirement account rules is a good idea. Here are three areas to check.
Required minimum distributions. You're probably aware of one aspect of RMDs -the need to take a specified amount from your traditional IRA before December 31 once you reach age 70½. But what about other IRAs? For example, you may be required to take a distribution from an IRA you inherited. Those RMDs cannot be combined with the distribution you take from your own account. Excess contributions. When you contribute more than the amount allowed to your IRA, you'll pay an excise tax on the overage until you correct it. The maximum allowable contribution is $5,500 for 2014 and 2015, plus another $1,000 if you're age 50 or older. The total annual limitation is not per account - it applies to all your IRAs.
Wash sales. Tax law prohibits a current deduction for a loss when you sell a stock and buy a substantially identical stock within the 30 days before or after the sale. The wash sale rule applies even if you sell a stock in a taxable account and repurchase it inside your IRA.
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As you update your beneficiary designations and wrap up other tax-related year-end matters, take time to make sure your estate plan reflects current rules. Why? Maybe you're thinking estate planning is no longer necessary, especially with the higher estate tax exclusions of $5,430,000 for 2015, and $5,450,000 for 2016. But even if the current value of your estate is lower than those amounts, a return may be needed in order to benefit from the "portability" election.
The portability rules, which the IRS finalized this summer, protect your spouse from estate taxes on the future growth of your assets by taking advantage of the unused portion of your estate exclusion. The portability rules can have an impact on the effectiveness of trusts created in prior years, so include time in your planning to review and update those documents as well. Other portability rule considerations include your wishes regarding former spouses or the children of your current marriage and understanding state laws and taxes affecting estates and inheritances.
Give me a call. We'll help you keep your estate plan up to date. |
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Tax Tip of the Week: Health insurance decisions will affect your 2016 tax return. Read this article for more information before you make your decision. The penalties are much steeper for 2016 so be informed when choosing which is best for you and your family. Please call me with any questions.
Business Tip of the Month: As a business owner you have opportunities to improve your company in hearing from your employees. An exit interview is actually a great time to pick the departing employee's brain as to the company's shortcomings or inefficiencies. Of course, it depends on the employee and the reason for leaving! Check out this article for some helpful tips. Financial Tip of the Month: Tis the season for buying gifts but also, can be the season when "impulse purchases" get out of hand! Having a budget is good financial sense. Making lists and keeping track of what your expenses and income are throughout the year will help you from just buying wants versus needs! The retailers are counting on you to buy, buy, buy!!! Read this article for some helpful tips!
Fraud Alert: Who can resist the cuteness of a puppy when you're looking for that special furry companion? Believe or not, the fraudsters know that the picture of a cute, fluffy puppy is pulling at your heartstrings, especially if it's a certain breed that you're looking for!! But beware - there are scams out there that'll will take your money and you will never have the puppy or the money!! Read this article for some eye-opening tricks that are used to get you to buy the puppy in the picture! |
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Let me know if I can help you with any Quickbooks problems.
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https://www.facebook.com/pages/Linda-L-Heineman-CPA/266124360085715?ref=tn_tnmn
Sincerely,
Linda Heineman
Linda L. Heineman, CPA
email:
linda@llhcpa.com
phone:
626-577-0979
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