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Seven ways for small businesses to rein in health care costs

 

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The Journal of Accountancy has a very timely and insightful look at ways small businesses can save money on health care costs. Although delayed one year, the employer mandate in the Patient Protection and Affordable Care Act takes effect Jan. 1, 2015 and businesses with 50 or more full-time-equivalent employees will be forced to pay a penalty if they don’t provide minimum essential health insurance coverage. Read more HERE.

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IRS Tax Season Begins Today! Yipee!

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Break out the champagne and confetti: the IRS opens the 2014 filing season today, January 31, 2014.

Okay, usually only tax pros like us– or those getting a decent refund– actually get that excited about the opening of tax season. But after the government shutdown pushed the opening of the season forward ten days – from January 21, 2014, to January 31, 2014 – taxpayers all over the country are ready for tax season to begin. You can begin e-filing today. For a lot more info, check out this Forbes article HERE!

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IRS Lowering Mileage Allowances For Business Travel

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The IRS has announced that the optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) will decrease by $.05 to $.56 per mile for business travel starting January 1, 2014. This rate can also be used by employers to reimburse tax-free under an accountable plan employees who supply their own autos for business use, and to value personal use of certain low-cost employer-provided vehicles.

The rate for using a car to get medical care or in connection with a move that qualifies for the moving expense will also decrease by $.05 to $.235 per mile.  The rate for service to a charitable organization is unchanged at $.14 per mile.  Notice 2013-80, 2013-52 IRB ; IR 2013-95

 

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8 Tax Breaks Set to Expire at the End of 2013

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April 15 will be here sooner than you think! With a little planning before the end of the year, you could take advantage of tax breaks to help you lower your tax bill. Several tax provisions are scheduled to expire at the end of this year. Many of these tax breaks have been extended in the past, so it’s possible Congress could extend them again. Click HERE for a look at eight tax breaks to consider now before they disappear.

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2014 Inflation Adjustments

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The IRS has released its list of inflation-adjusted tax amounts for 2014.  The list includes tax rate tables for estates, trusts and various filing statuses, standard deduction amounts, personal exemption amounts, AMT exemption, and gift tax annual exclusion.  Below is a full list of the items from the IRS:

The tax items for tax year 2014 of greatest interest to most taxpayers include the following dollar amounts.

  • The tax rate of 39.6 percent affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000, respectively. The other marginal rates – 10, 15, 25, 28, 33 and 35 percent – and the related income tax thresholds are described in the revenue procedure.
  • The standard deduction rises to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively, for tax year 2013. The standard deduction for heads of household rises to $9,100, up from $8,950.
  • The limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).
  • The personal exemption rises to $3,950, up from the 2013 exemption of $3,900. However, the exemption is subject to a phase-out that begins with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly). It phases out completely at $376,700 ($427,550 for married couples filing jointly.)
  • The Alternative Minimum Tax exemption amount for tax year 2014 is $52,800 ($82,100, for married couples filing jointly). The 2013 exemption amount was $51,900 ($80,800 for married couples filing jointly).
  • The maximum Earned Income Credit amount is $6,143 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,044 for tax year 2013. The revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phaseouts.
  • Estates of decedents who die during 2014 have a basic exclusion amount of $5,340,000, up from a total of $5,250,000 for estates of decedents who died in 2013.
  • The annual exclusion for gifts remains at $14,000 for 2014.
  • The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) remains unchanged at $2,500.
  • The foreign earned income exclusion rises to $99,200 for tax year 2014, up from $97,600, for 2013.
  • The small employer health insurance credit provides that the maximum credit is phased out based on the employer’s number of full-time equivalent employees in excess of 10 and the employer’s average annual wages in excess of $25,400 for tax year 2014, up from $25,000 for 2013.

Details on these inflation adjustments and others not listed in this release can be found in Revenue Procedure 2013-35, which were published in Internal Revenue Bulletin 2013-47 on Nov. 18, 2013.

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Tax Planning for Grandparents Helping With College

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As the holiday season is upon us, this time of the year we find ourselves answering lots of questions from grandparents who want to use holiday gifts to help pay for or contribute to their grandchildren’s college education. The queries always revolve around one simple theme— how do I maximize my tax advantages when paying for my grandchild’s college expenses? There are a few options to consider and definitely some dos and don’ts. Our own Kelly Roberts has authored a nice piece on the subject that was featured in Carolina Business Connection. Read more HERE.

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NC Employers Must Collect New Form NC-4 EZs or NC-4s

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The North Carolina General Assembly recently enacted House Bill 998 which will affect individual taxes beginning on or after January 1, 2014. (These changes will not affect the tax returns you file on April 15, 2014) The new law eliminates all personal exemptions for taxpayers, their spouse, children, or any other qualifying dependents. As a result, every employer must have all employees provide a new Employee’s Withholding Allowance Certificate, either Form NC-4 EZ or Form NC-4 so the correct amount of State income tax is withheld for any payment periods beginning on or after January 1, 2014.

Read all about it HERE.

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IRS Warns Consumers About New Phone Scam

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The IRS is warning consumers about a very sophisticated phone scam that has been targeting taxpayers— especially recent immigrants— throughout the country.

Often using fake IRS badge numbers and names, the perpetrators inform victims they owe money to the IRS which must be paid immediately through pre-loaded debit cards or wire transfers. Victims who refuse are told they face arrest, deportation and/or suspension of business/driver’s license.

The IRS will never ask anyone for a credit card number over the phone. If consumers receive such a call, they should call the IRS at 1-800-829-1040 to verify any claims of money owed. They can also report the incident to the Treasury Inspector General for Tax Administration at 1-800-366-4484.

For more information, click HERE or call Scharf Pera & Co., PLLC at 704-372-1167.

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