New IRS Regulation Makes Restaurateurs Rethink Automatic Tips
Restaurant owners may need to rethink the practice of adding automatic tips for large parties. A new IRS regulation that starts in January now identifies automatic gratuities as service charges. That means payroll tax withholding! Find out the details in this Wall Street Journal article.
Treasury/IRS Announce Legal Same-Sex Marriages To Be Recognized For Federal Tax Purposes
The U.S. Department of the Treasury and the Internal Revenue Service (IRS) has ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage. To find out more information about the ruling and its implications, click HERE.
Scharf Pera & Co., PLLC Prepares For Annual Day of Service!
On September 20, 2013, Scharf Pera & Co., PLLC will be participating in the NCACPA’s 2nd annual “Day of Service.” This is a special day set aside for our employees to join forces to support a local charity. This year we will be helping to stock the shelves at Charlotte’s Loaves & Fishes Food Pantry. Loaves & Fishes is a 501(c)(3) nonprofit, nondenominational organization which provides a week’s worth of nutritious groceries to individuals and families in a short-term crisis. In 2012, Loaves & Fishes provided groceries to 126,803 people.
If you would like to help our efforts with food donations, please bring them to our office by September 19, 2013 and we will be happy to deliver them for you. Currently, Loaves & Fishes priority needs are canned meats, 100% juice, canned fruit, canned pastas (such as Spaghettio’s) and cereal.
Proposed small employers’ health insurance premium tax credit rules issued
The IRS has issued proposed regulations governing the Sec. 45R credit for small employers that offer health insurance coverage for employees . The biggest differences involve the amount of the credit, the fact that employers must obtain the insurance coverage through an exchange, and a new two-year limit on taking the credit. Read all about it HERE.
Is Your Company Missing Out on State and Local Tax Incentives?
If you’re a corporate executive, you should really be considering all of the state and local tax incentives that are available to your company before entering a capital project. It would simply be a shame to leave money on the IRS’ table that you don’t have to. For three important steps that can help, click HERE.
Back-to-School Tax Tips For Students and Parents
Going to college can be a stressful time for students and parents. In this article, the IRS offers several helpful tips about education tax benefits that can help offset some college costs and maybe relieve some of that stress. For more information, click HERE.
Business Lunch? New Regs Clarify Limitations on Deductions.
Inviting someone to a business lunch/dinner has meant you can only deduct 50% of the expense as it’s assumed you’re going to have to eat anyway. But new final regulations help clarify which party is subject to the 50% limitation. Interesting information so read more HERE.
Get Ready For NC’s FINAL Sales Tax Holiday Weekend
August 2 – 4, North Carolina will observe its final sales tax holiday weekend. Kelly Roberts gives all the info you’ll need to maximize sales tax savings this weekend in an article published in the Carolina Business Connection. Read more HERE.
NC Lawmakers Agree on Significant Tax Reform
On July 17, 2013, North Carolina lawmakers came to an agreement on a state tax reform policy. The new policy, known as the Tax Simplification and Reduction Act of 2013, reduces income taxes for corporations and individuals, eliminates the estate taxes and broadens the scope of the sales and use tax. Unless otherwise noted, the provisions of the Act are effective January 1, 2014.
The highlights of the Act are as follows:
Individual Income Taxes
- Replaces current tax structure with a 5.8% flat tax rate beginning January 1, 2014 and a 5.75% flat tax rate for subsequent years
- Eliminates personal exemptions but increases some of the standard deductions (standard deduction for married filing jointly remains at $15,000):
|Head of Household
|Married, filing separately
- Eliminates retirement income deduction, however, retains the tax exemption for social security income.
- Eliminates severance wages deduction and the $50,000 business income deduction.
- Sets the maximum itemized deduction for real estate taxes and mortgage interest at $20,000, but retains the unlimited deductibility of charitable contributions.
- Eliminates or changes many of the current tax credits including the child care credit, child tax credit (increases if you make less than $40,000), disability credit and education expenses credit. The long-term care insurance credit, refundable earned income tax credit and adoption expenses credit will all expire at the end of 2013.
Corporate Income Taxes
- Reduces the corporate income tax rate to 6% in 2014 and 5% in 2015
- Includes provisions to potentially reduce the corporate income tax rate to 4% in 2016 and 3% in 2017
- Maintains current franchise tax rate
Sales and Use Taxes
- Caps excise tax on motor fuel at 37.5 cents through June 30, 2015
- Expands the current sales tax rates to movies, live entertainment and museums
- Requires sales tax to be assessed on warranty agreements, maintenance agreements, repair contracts and other contracts for maintaining and repairing tangible personal property. Previously, these types of service contracts were exempt from sales tax.
- Eliminates the sales tax holidays in 2014 for school supplies, computers, clothing and Energy Star appliances
- Eliminates the North Carolina estate tax effective January 1, 2013.
Please do not hesitate to contact us with your questions or concerns about these changes and how they may affect you or your business.
Tips For Taxpayers Who Travel for Charity Work
Are you traveling this summer to do volunteer work for your house of worship or other charitable organization? Some travel expenses may help lower your taxes if you itemize deductions when you file next year. To find out if you qualify and what deductions you can take, read more HERE.