Throw a Company Picnic for Employees This Summer and Enjoy Larger Deductions

Throw a Company Picnic for Employees This Summer and Enjoy Larger Deductions

Many businesses host a picnic for employees in the summer. It’s a fun activity for your staff and you may be able to take a larger deduction for the cost than you would on other meal and entertainment expenses Deduction limits Generally, businesses are limited to deducting 50% of allowable meal and entertainment expenses. But certain expenses are 100% deductible, including expenses: -For recreational or social activities for employees, such as summer picnics and holiday parties, -For food and beverages furnished at the workplace primarily for employees, and -That are excludable from employees’ income as de minimis fringe benefits. There is one caveat for a 100% deduction: The entire staff must be invited. Otherwise, expenses are deductible under the regular business entertainment rules. Recordkeeping requirements Whether you deduct 50% or 100% of allowable expenses, there are a number of requirements, including certain records you must keep to prove your expenses. If your company has substantial meal and entertainment expenses, you can reduce your tax bill by separately accounting for and documenting expenses that are 100% deductible. If doing so would create an administrative burden, you may be able to use statistical sampling methods to estimate the portion of meal and entertainment expenses that are fully deductible. For more information about deducting business meals and entertainment, including how to take advantage of the 100% deduction, please contact us. ©...
Don’t miss your opportunity  to make 2015 annual exclusion gifts

Don’t miss your opportunity to make 2015 annual exclusion gifts

Recently, the IRS released the 2016 annually adjusted amount for the unified gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption: $5.45 million (up from $5.43 million in 2015). But even with the rising exemptions, annual exclusion gifts offer a valuable tax-saving opportunity. The 2015 gift tax annual exclusion allows you to give up to $14,000 per recipient tax-free — without using up any of your gift and estate or GST tax exemption. (The exclusion remains the same for 2016.) The gifted assets are removed from your taxable estate, which can be especially advantageous if you expect them to appreciate. That’s because the future appreciation can avoid gift and estate taxes. But you need to use your 2015 exclusion by December 31. The exclusion doesn’t carry over from year to year. For example, if you and your spouse don’t make annual exclusion gifts to your grandson this year, you can’t add $28,000 to your 2016 exclusions to make a $56,000 tax-free gift to him next year. Questions about making annual exclusion gifts or other ways to transfer assets to the next generation while saving taxes? Contact us! ©...
Gearing up for the ACA’s information reporting requirements

Gearing up for the ACA’s information reporting requirements

Starting in 2016, applicable large employers (ALEs) under the Affordable Care Act (ACA) will have to file Forms 1094-C and 1095-C to provide information to the IRS and plan participants regarding their health care benefits for the previous year. Both the forms and their instructions are now available for ALEs to study and begin preparations for required filings. In addition, organizations that expect to file Forms 1094 and 1095 electronically can peruse two final IRS publications setting out specifications for using the new ACA Information Returns system. Keep in mind that ALEs are employers with 50 or more full-time employees or the equivalent. And even ALEs exempt from the ACA’s shared-responsibility (or “play or pay”) provision for 2015 (that is, ALEs with 50 to 99 full-timers or the equivalent who meet certain eligibility requirements) are still subject to the information reporting requirements in relation to their 2015 health care benefits. If your company is considered an ALE, please contact us for assistance in navigating the ACA’s complex requirements for avoiding penalties and properly reporting benefits. If you’re not an ALE, we can still help you understand how the ACA affects your small business and determine whether you qualify for a tax credit for providing coverage. ©...
Your exec comp could be subject to  the 0.9% additional Medicare tax or the 3.8% NIIT

Your exec comp could be subject to the 0.9% additional Medicare tax or the 3.8% NIIT

The additional Medicare tax and net investment income tax (NIIT) apply when certain income exceeds the applicable threshold: $250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for other taxpayers. The following types of executive compensation could be subject to the 0.9% additional Medicare tax if your earned income exceeds the applicable threshold: • Fair market value (FMV) of restricted stock once the stock is no longer subject to risk of forfeiture or it’s sold • FMV of restricted stock when it’s awarded if you make a Section 83(b) election • Bargain element of nonqualified stock options when exercised • Nonqualified deferred compensation once the services have been performed and there’s no longer a substantial risk of forfeiture And the following types of gains from exec comp will be included in net investment income and could be subject to the 3.8% NIIT if your modified adjusted gross income (MAGI) exceeds the applicable threshold: • Gain on the sale of restricted stock if you’ve made the Sec. 83(b) election • Gain on the sale of stock from an incentive stock option exercise if you meet the holding requirement Concerned about how your exec comp will be taxed? Please contact us. We can help you assess the potential tax impact and implement strategies to reduce it. ©...