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November 2015

Small businesses score victory with PACE Act, wait for fix on health reimbursement arrangements

Small businesses received some welcomed news in October with passage of the Protecting Affordable Coverage for Employees (PACE) Act. The new law revises the definition of small employer for purposes of market reforms under the Affordable Care Act (ACA). The PACE Act is intended to help protect small businesses from potential health care premium increases. At the same time, many […]

How Do I…Shift Taxable Income into 2016?

As the calendar approaches the end of 2015, it is helpful to think about ways to shift income and deductions into the following year. For example, spikes in income from selling investments or other property may push a taxpayer into a higher income tax bracket for 2015, including a top bracket of 39.6 percent for ordinary income and short-term capital […]

FAQ: When is Equipment “Placed in Service”?

For a business to start writing off the cost of depreciable equipment and property, it is necessary that the equipment be placed in service. To write off costs in 2015, the equipment must be placed in service by December 31, 2015. The “placed-in-service” requirement applies, for example, for taking depreciation, especially first-year bonus depreciation, under Code Sec. 168, expensing of […]

FAQ…Can I deduct the cost of sending my child to summer camp?

Now that summer 2015 is officially here and the main filing season is out of the way, tax planning may be far from your mind. However, typical summer traditions can yield tax benefits. For example, when school lets out for the summer, some parents may decide to send their young children to summer camp. Whether parents do this to supplement […]

FAQ: When must individuals pay estimated taxes?

Many federal income taxes are paid from amounts that are withheld from payments to the taxpayer. For instance, amounts roughly equal to an employee’s estimated tax liability are generally withheld from the employee’s wages and paid over to the government by the employer. In contrast, estimated taxes are taxes that are paid throughout the year on income that is not […]

November 2015 tax compliance calendar

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important tax reporting and filing data for individuals, businesses and other taxpayers for the month of November 2015.

November 4
Employers. Semi-weekly depositors must deposit employment taxes for payroll dates October 28–30

November 6
Employers. Semi-weekly depositors must deposit employment taxes […]

IRS Raises Tangible Property Expensing Threshold to $2,500

accountingtoday.com

The Internal Revenue Service is simplifying the paperwork and recordkeeping requirements for small businesses by raising the safe harbor threshold for deducting certain capital items from $500 to $2,500.

Full article on accountingtoday.com

How Do I…Shift Taxable Income into 2016?

As the calendar approaches the end of 2015, it is helpful to think about ways to shift income and deductions into the following year. For example, spikes in income from selling investments or other property may push a taxpayer into a higher income tax bracket for 2015, including a top bracket of 39.6 percent for ordinary income and short-term capital […]

IRS promises more identity theft protections in 2016 filing season

After acknowledging earlier this year that hackers breached one of its popular online apps, the IRS has promised more identity theft protections in the 2016 filing season. The IRS, along with partners in the tax preparation community, has identified and tested more than 20 new data elements on returns to help detect and prevent identity-theft related filings. The agency is […]

Clock ticks down to year-end passage of tax extenders for individuals and businesses

As 2015 winds down, another temporary extension of the tax extenders appears almost certain. Despite talk in early 2015 about finding a permanent solution to the on-again, off-again extenders, the arrival of November brings a short window for Congress to extend these tax breaks. The expected late passage of these popular tax breaks also adds uncertainty to year-end tax planning […]

IRS takes aim at employment tax compliance

The current likelihood that your business will become involved in an employment tax audit or an employment-related income tax audit has increased: the IRS is aggressively attempting to reduce the “tax gap” of uncollected revenues in a time of increasing budget austerity. Employment tax noncompliance is estimated by the IRS to account for approximately $54 billion of the tax gap. […]

ABC Woods Ovaitt Donation

November 18, 2015:

Tim Flaherty (far right) at a check presentation from Woods Oviatt Gilman LLP to Action for a Better Community. Every year, Woods Oviatt Gilman LLP selects certain charities to contribute to under their holiday contribution program. Action for a Better Community (ABC) is a community action agency in Rochester, which Tim serves as a finance committee member and […]

Keeping good records for tax season and beyond – some guidelines

Good recordkeeping is essential for individuals and businesses before, during, and after the tax filing season.

First, the law actually requires taxpayers to retain certain records for a specified number of years, for example tax returns or employment tax records (for employers).

Second, good record is essential for taxpayers while preparing their tax returns. The Tax Code frequently requires taxpayers to substantiate […]

The tricky distinction between employees and independent contractors

In light of the IRS’s new Voluntary Worker Classification Settlement Program (VCSP), which it announced this fall, the distinction between independent contractors and employees has become a “hot issue” for many businesses. The IRS has devoted considerable effort to rectifying worker misclassification in the past, and continues the trend with this new program. It is available to employers that […]

How do I? Compute withholding using the part-year employment method

Employers generally withhold from wages by way of the wage-bracket or percentage method (Code Sec. 3402(b) and Code Sec. 3402(c)). However, an employee may request that the amount of tax withheld by the employer from the employee’s wages be computed on the basis of the part-year employment method (Reg. §31.3402(h)(4)-1(c)(1)). Under this method, an individual who is employed no more […]

Treasury, IRS get moving on ABLE account rules

Late in 2014, Congress passed and President Obama signed into the law the Achieving a Better Life Experience (ABLE) Act. The new law, which enjoyed strong bipartisan support, authorizes the creation of tax-favored accounts for qualified individuals challenged by disabilities. Congress instructed Treasury and the IRS to quickly issue guidance and the agency did so in June. The new guidance […]

How the IRS resolves an identity theft case

The IRS has responded to criticism from the Treasury Inspector General for Tax Administration and the National Taxpayer Advocate, among others, that resolution of identity theft accounts takes too long by increasing its measures to flag suspicious tax returns, prevent issuance of fraudulent tax refunds, and to expedite identity theft case processing. As a result, the IRS’s resolution time has […]

How do I? Comply with the Affordable Care Act’s individual mandate?

Beginning January 1, 2014, the Affordable Care Act (ACA) required individuals to carry minimum essential health coverage or make a shared responsibility payment, unless exempt. Individuals will report on their 2014 federal income tax return if they had minimum essential health coverage for all or part of the year. Individuals who file Form 1040, U.S. Individual Income Tax Return, will […]

FAQ: What is the new de minimis safe harbor for tax expensing?

Businesses generally want to write off costs more quickly, to reduce their taxable income and their tax burden. One mechanism for accomplishing this is to deduct the costs of depreciable property rather than capitalizing them. Under Code Sec. 179, taxpayers can expense a prescribed amount of their costs for tangible depreciable property, even if the ordinary accounting treatment would be […]

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