As January 1, 2014 gets closer, year-end tax planning considerations should be starting to take shape. New tax legislation has brought greater certainty to year-end planning, but has also created new challenges. The number of changes made to the Tax Code and the opportunities these changes bring may seem overwhelming. However, early planning will help you to maximize your potential tax savings and minimize your tax liability. Our 2013 Tax Planning Guide is now available on our website for your review. Please contact us soon for a year-end planning review.
The Internal Revenue Service has announced a delay of approximately one to two weeks to the start of the 2014 filing season due to the 16-day federal government shutdown.
The government closure came during the peak period for preparing IRS systems for the 2014 filing season. Updating these core systems is a complex, year-round process with the majority of the work beginning in the fall of each year.
There are additional training, programming, and testing demands on the IRS this year as the agency works to prevent refund fraud and identity theft.
The IRS is exploring options to shorten the delay and will announce a final decision on the start of the 2014 filing season in December.
When Congress tried unsuccessfully to expand the Form 1099 filing requirements a couple of years ago, at least one thing was accomplished. It raised awareness of an important IRS business reporting rule. And at $100 per infraction, the penalty for ignoring this regulation can be painful.
That’s right; the IRS can fine you $100 for each 1099 form that you fail to file, up to a maximum penalty of $1.5 million. The most common Form 1099 is the 1099-MISC, which is used to report payments of $600 or more to vendors who provide services to your business. Examples include payment for repairs, accounting services, consulting fees, and legal advice. Normally if the vendor is incorporated you do not need to send them a 1099-MISC, but there is one important exception. All payments to attorneys must be reported, whether they are incorporated or not.
Timely filing of the Form 1099-MISC is also critical. The form must be filed with the IRS by February 28 (unless you file electronically). But you must provide the vendor a copy of the form by January 31. Electronic filing is optional if you file fewer than 250 forms. If you have 250 or more forms to file, you are required to file electronically. The deadline for electronic filing is March 31.
There are a few more twists. If you pay a vendor for parts and services, you must include the total of both of these on your form as long as the parts or materials were incidental. If materials were the predominate nature of the payment, they are left out. Reporting is also required if you provide non-employees taxable fringe benefits or pay fees to your board of directors.
Looking for an easy solution to these requirements? Pay all your vendors by credit card. You do not have to report payments made by credit or debit card, or by services like PayPal. The bank or third-party payment provider is required to report those transactions.
There are other types of Form 1099s to watch for. A Form 1099-INT is used to report interest payments of $10 or more to an individual in the course of a trade or business. Form 1099-R is used by investment companies to report distributions from retirement accounts and annuities. And businesses that make loans are required to disclose canceled debt on Form 1099-C if the amount is $600 or more.
If these reporting rules leave you uncertain of your responsibilities, give our office a call. A little attention paid now might help prevent a painful penalty later.
Although the employer mandate for providing health insurance coverage to workers under the Affordable Care Act (ACA) was postponed for one year – until January 1, 2015 – the rules for individuals remain in place, at least for the foreseeable future. What are your main rights and responsibilities under the ACA? Here’s a brief summary.
Essentially, unless you are already covered by an employer’s plan, Medicare, or Medicaid, you’re required to obtain coverage on your own or pay a penalty. The plan is to have affordable options available through state-operated exchanges. Some low-to-moderate income families may be eligible for various subsidies.
As the population in the U.S. continues to age, more and more people will find themselves caring for their parents. Here are some of the tax breaks that caregivers should consider.
For more information about the tax issues affecting caregivers and their parents, please give us a call.
Rager, Lehman & Houck, P.C. is proud to announce that Sherry Cracium-Bolin was selected as one of Central Penn Business Journal’s Forty under 40 winners for 2013. Sherry was selected for this prestigious award based on her commitment to business growth, professional excellence and community service. The awards ceremony was held on October 16, 2013 at the Harrisburg Hilton and several RLH team members joined Sherry as she accepted her award. Please join us in congratulating Sherry for this outstanding achievement.
Click to read full story here: http://www.cpbj.com/article/20131002/AWARDS/131029910/Sherry-M-Cracium-Bolin-CPA
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