Category: Small Business
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What to do if your W-2 includes taxable health benefits
Summary: Employer-paid health benefits included as W-2 taxable wages is an accounting error that appears to flourish this year due to misinterpretation of tax laws surrounding the Affordable Care Act by small business accountants. The error financially hurts employees by overstating tax liability and reducing eligibility for various tax credits. Fix the error by talking to…
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An idea to improve telephone support in my 1 person practice
I’m trying a new experiment to improve service to callers who do not reach me by phone. For telephone calls that I miss and the caller does not leave a message (typically about 3-5 calls per day), I am using the desktop version of Verizon Messenger (because my business calls are forwarded to the cell…
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Why are tax attorneys so expensive?
The Wall Street Journal ran an article this week about the number of attorneys billing at $1,000 to $1,500 per hour. It turns out that there were more tax attorneys in the list than any other type. Why? In my own practice, the primary consideration in setting a fee is an estimate of the likely…
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Three benefits of operating as an LLC
If you are self-employed, there may be at least three benefits of operating your business as a Limited Liability Company (LLC). In most states the cost is roughly about $200 to form a LLC and about $100 per year to maintain it. The potential benefits are: Liability protection – This is the usual reason, to…
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My QuickBooks ProAdvisor certification for 2016
QB ProAdvisor I just completed the 2016 re-certification for QuickBooks Online ProAdvisor. It was a 4 hour webinar on Sunday, then 5 self-study modules that take about 6 hours, then 5 online exams of 15 questions each, The five tests were easier this year than last year because I had taken some years off from…
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Health care law changes the way we look at personal financial security
February 1, 2016 marked a milestone in the field of tax and financial planning for middle income Americans. The way that we will look at our health care planning and financial liabilities begins to shift today and perhaps forever. Yesterday the open enrollment season for the Obamacare health insurance exchanges closed leaving about 1 in…
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Who is responsible when the payroll service screws up?
A new legal case might give some insight to responsibility for compliance with the maze of federal, state and local laws controlling electronic banking and payroll transactions Most small businesses that pay employees or contractors use a third-party payroll accounting service to handle the required record-keeping and tax payment transactions. These services are inexpensive, typically…
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Eight common financial mistakes in a divorce
The names in these examples are not real but are used to reinforce the point that the stories are taken from real life divorce. The examples were originally developed for use in study materials for an adult education program in financial planning at Delaware Valley University in the early 1990s. Over the years I have…
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How to change the tax reporting of employer health insurance payments
There is a ‘wrong way’ and a ‘right way’ to report a change in employee health insurance payments to avoid payroll tax liability problems Case 1: The wrong way to change employer reporting of health insurance Tom works for ABC Inc. at a salary of $50,000. ABC has no health insurance plan but agreed to reimburse…
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Employer health insurance payments are not wages
Employer-paid health insurance may not be included in employee wages. Doing so, even in error, does not alleviate the employer from possible excise taxes under ACA. This errant accounting practice also creates additional employer tax penalty liabilities for improper reporting of wages. This afternoon I attended a continuing professional education webinar where a fabulous tax expert…