11 tax traps for small business health plans

Posted 3 CommentsPosted in Accounting, Employee Benefits, Small Business, Taxes

The issue starts out innocently enough: a small business employer simply wants to help employees pay for the cost of health care. So the employer voluntary offers to make a payment for that purpose. That’s where the simplicity ends and the tangle of tax laws comes into play. It is far too easy for an employer […]

Retroactive termination of employee benefit plans

Posted 1 CommentPosted in Accounting, Employee Benefits, Small Business, Taxes

Don’t believe everything you read on the Internet! Lately I’ve written that the general rule is that you can not retroactively terminate or amend an employee benefit plan but that under certain circumstances it may be better to do so than not. This is not a topic that lends itself well to a blog post. […]

What options are available to employers who wish to help employees afford the cost of health care?

Posted 4 CommentsPosted in Employee Benefits, Small Business, Tax Planning, Taxes

Provisions of the Affordable Care Act dramatically changed the tax treatment of employer-paid health benefits. Some of the most popular traditional health plans of the recent past now trigger an extremely harsh tax on the employer. Taxes of up to $36,500 per employee per year kicked in on July 1, 2015 for businesses with less than […]

Quoting fees for tax return preparation

Posted Leave a commentPosted in Accounting, Tax Planning, Taxes

Another accountant proposed the concept that there is significant business value of having a standardized and rehearsed response to an initial call from a potential client asking about tax work. I agree. We presume that a primary motivation of the caller is to push for price information. But giving a price with limited information is risky and, […]

Clear explanation that there are no “1099 employees”

Posted 1 CommentPosted in 401(k), Accounting, Employee Benefits, Small Business, Taxes

I like this clear simple language in Employee Benefit News: “Employers face an uphill battle in classifying a worker as an independent contractor due to DOL guidance that defines ‘employee’ so broadly that such a classification should only be reserved for a narrow subset of workers.” It is amazing how many employers are oblivious of […]

Most workers are employees

Posted 1 CommentPosted in Accounting, Employee Benefits, Taxes

The issue of worker misclassification – where businesses classify workers as independent contractors and local, state and federal authorities call them employees –  is a long-standing problem area for small businesses. Federal and state auditors (not just tax but worker’s compensation as well) have been engaged in an aggressive “crackdown” on misclassified workers. This week […]

Tax planning for small business excise tax penalties under IRC 4980D

Posted 2 CommentsPosted in Employee Benefits, Small Business, Taxes

Tax professionals are looking for the best way to approach clients in this environment of uncertainty surrounding new excise taxes for small business health plans. The excise tax affects two types of plans: 1) those that use individual health insurance, and 2) those that reimburse employee out-of-pocket expenses (often called an “HRA”). Those who say […]

Fixing the problems of financial do-it-yourselfers

Posted Leave a commentPosted in Accounting, Financial Planning, Small Business, Taxes

New Jersey financial adviser Michael Kay wrote in yesterday’s Wall Street Journal “Do-it-yourselfers often approach advisers as a last resort when they have an especially complex or urgent financial issue, and advisers should proceed carefully with this type of client.” Since the launch of my own practice six months ago, I notice that a high […]

“CPA is too expensive” says this woman

Posted Leave a commentPosted in Accounting, Taxes

but ignorance is priceless! A professional tax preparer shared this hilarious story: A single woman with a salaried position was looking for help with her “simple” tax return. She also has a side business as an artist. The art work generates minimal income but much larger tax deductions that resulted in losses of at least […]