2015 Tax Rates, Standard Deductions, Personal Exemptions, Credit Amounts & More – Forbes

2015 Tax Rates, Standard Deductions, 

2015 Tax Rates, Standard Deductions, Personal Exemptions, Credit Amounts & More

by   Kelly Phillips Erb,,Contributor  http://onforb.es/1A43WVB  TAXES   5/14/2015 

With tax season firmly behind us (er, for those of you who didn’t file for extension), now is a good time to take a look at your current financial picture and check to see how it squares against the 2015 tax rates, adjustments and other tax items. If you aren’t expecting any significant changes, you can use the updated tax tables to estimate your liability for the 2015 tax year. If, however, you are expecting to make more money, get married, buy a house, have a baby or other life change, you’ll want to consider adjusting your withholding or tweaking your estimated tax payments.

To help you out, I’ve attached the 2015 tax rates and more below. Last fall, the Internal Revenue Service (IRS) announced the annual inflation adjustments for a number of provisions for the year 2015, including tax rate schedules, tax tables and cost-of-living adjustments for certain tax items effective January 1, 2015. This is the information that you’ll use to prepare your 2015 tax returns in 2016.

The tax rates for 2015 are as follows:Single_ratesMFJHOHMFSTrusts_EstatesYou can see how the rates for 2015 compare to the 2014 brackets here.

The standard deduction amounts for 2015 are as follows:Personal_Exemption

For those taxpayers who itemize their deductions, the Pease limitations, named after former Rep. Don Pease (D-OH) may cap or phase out certain deductions for high income taxpayers. The Pease thresholds for 2015 are:PeaseIf the Pease limitations apply, the total of all your itemized deductions is reduced by the lesser of:

  • 3% of AGI above the applicable threshold; or
  • 80% of the amount of itemized deductions otherwise allowable for the tax year.

Pease limitations apply to charitable donations, the home mortgage interest deduction, state and local tax deductions and miscellaneous itemized deductions. They do not apply to medical expenses, investment expenses, gambling losses and certain theft and casualty losses.

(You can read more about the Pease limitations and how they affect affluent taxpayers here.)

Keep in mind that the floor for medical expenses remains 10% of adjusted gross income (AGI) for most taxpayers. Taxpayers over the age of 65 may still use the 7.5% through 2016.

The personal exemption amount for 2015 is $4,000, up from $3,950 in 2014. Phaseouts apply as follows:PEP threshold

In years past, the AMT was subject to a last minute scramble by Congress to “patch” the exemption but as part of the American Taxpayer Relief Act of 2012 (ATRA), the AMT exemption amounts are permanently adjusted for inflation – that’s why you now see it in this list.AMT The Social Security Administration, not IRS, releases Social Security benefit and wage base information each year. For 2015, those amounts are:SS

The kiddie tax applies to unearned income for children under the age of 19 and college students under the age of 24. For 2015, the threshold for the kiddie tax – meaning the amount of unearned net income that a child can take home without paying any federal income tax – is $1,050. All unearned income in excess of $2,100 is taxed at the parent’s tax rate.

Some tax credits are also adjusted for 2015. Some of the most common tax credits are:

  • Earned Income Tax Credit (EITC). For 2015, the maximum EITC amount available is $3,359 for taxpayers filing jointly with one child; $5,548 for two children; $6,242 for three or more children (up from $6,143 in 2014) and $503 for no children. Phaseouts are based on filing status and number of children and begin at $8,240 for single taxpayers with no children and $18,110 for single taxpayers with one or more children.
  • Child & Dependent Care Credit. For 2015, the value used to determine the amount of credit that may be refundable is $3,000 (the credit amount has not changed). Keep in mind that this is the value of the expenses used to determine the credit and not the actual amount of the credit.
  • Adoption Credit. For 2015, the credit allowed for an adoption of a child with special needs is $13,400, and the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $13,400. Phaseouts do apply beginning at taxpayers with modified adjusted gross income (MAGI) in excess of $201,010 and completely phased out for taxpayers with MAGI of $241,010 or more.
  • Hope Scholarship Credit. The Hope Scholarship Credit for 2015 will be an amount equal to 100% of qualified tuition and related expenses not in excess of $2,000 plus 25% of those expenses in excess of $2,000 but not in excess of $4,000. That means that the maximum Hope Scholarship Credit allowable for 2015 is $2,500. Income restrictions do apply and for 2015, those kick in for taxpayers with modified adjusted gross income (MAGI) in excess of $80,000 ($160,000 for a joint return).
  • Lifetime Learning Credit. As with the Hope Scholarship Credit, income restrictions apply to the Lifetime Learning Credit. For 2015, those restrictions begin with taxpayers with modified adjusted gross income (MAGI) in excess of $55,000 ($110,000 for a joint return).

Changes were also made to certain tax Deductions, deferrals & exclusionsfor 2015. You’ll find some of the most common here:

  • Student Loan Interest Deduction. For 2015, the maximum amount that you can take as a deduction for interest paid on student loans remains at $2,500. Phaseouts apply for taxpayers with modified adjusted gross income (MAGI) in excess of $65,000 ($130,000 for joint returns), and is completely phased out for taxpayers with modified adjusted gross income (MAGI) of $80,000 or more ($160,000 or more for joint returns).
  • Foreign Earned Income Exclusion. For 2015, the foreign earned income exclusion finally hits six figures: it’s now $100,800, up from $99,200 for 2014.
  • Flexible Spending Accounts. The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending accounts (FSA) edges up to $2,550 for 2015 (up from $2,500).
  • Elective Contribution Limits. The elective deferral limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan increased from $17,500 in 2014 to $18,000 in 2015. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $5,500 in 2014 to $6,000 in 2015.
  • IRA Contributions. The limit on annual contributions to an Individual RetirementArrangement (IRA) remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over remains at $1,000.

More cost-of-living and other adjustments are available through Revenue Procedure 2014-61.

 Kelly Phillips Erb,  Contributor    I cover tax: paying tax is painful but reading about it shouldn’t be.

Mileage log app for iPhone, iPad and Android

Several clients have requested my recommendation for an application to track their business mileage, since I am always nagging them to keep a log. After researching the market I believe that TripLog by eSocial LLC provides the functionality and ease of use that small business users will desire.  The free version should be all that is necessary for most single users, but if  needed, increased report-generating capability is available for a monthly fee.

Here are the details:

https://triplogmileage.com/ 

Track your vehicle mileage with GPS mobile log app for iPhone, iPad and Android with TripLog

With most innovative and advanced features, TripLog makes the mileage tracking a breeze.

It automates mileage tracking with GPS and power source. Monitor trips with Android widgets.

Plus vehicle and business expenses tracking, fuel economy calculation, and comprehensive IRS compliant reports.

Integrate with Intuit QuickBooks

Highlights

  • The ONLY app that Auto Starts when plug in to power and drive more than 5 mph
  • The only mileage tracking app reads vehicle odometer from OBD-II devices
  • Sync and merge data to TripLog Web Service from multiple devices (optional)
  • Most comprehensive reports compliant to IRS TAX returns
  • Upload backup data and receipt photos to Cloud
  • Trucker support with IFTA fuel tax report

GPS Tracking & Auto Start

  • Use GPS to track mileage, record actual driving route and show on Maps.
  • AUTO START when plugged in to power and drive more than 5 mph, or by set timeframe. Auto stop when vehicle stops and disconnected.
  • Find street address by latitude/longitude.
  • Query online map services for suggested driving distance and time. Show locations and directions on map.
  • Import location name and address from phone Contacts.
  • Mark location as tollbooth and automatically apply tolls to trips that pass through the tollbooth
  • Backup/restore data through device and cloud storage. Transfer data to other mobile devices.
  • Support multiple vehicles, multiple tax categories (business, medical, charity, etc.) and multiple business entities.
  • Customize mile or kilometre, gallon or litre, 16 currency symbols, and 7 date formats.

Comprehensive IRS compliant Reports

  • IRS compliant tax return HTML and CSV reports with built-in IRS 2012, 2013, 2014 mileage rates.
  • Take receipt photos and upload to cloud storage. Photos are available to download in HTML reports.
  • Turn regular expenses into scheduled reminders with time and mileage intervals.
  • Commercial truck support (scale, lumpers, and per diem allowance, and state-by-state mileage for IFTA fuel tax report).
  • Calculate fuel economy (MPG, L/100km, or KM/L).
  • Sync data between web service and multiple mobile devices.
  • Record actual driving route and show on maps

Download TripLog – GPS Mileage Tracker for FREE 

We’ve Moved!

We have moved to 111 Triad Center West, O’Fallon, Mo. 63366.  

We are working to organize and install our systems.  A letter will be mailed to all clients as soon as we are up and running.

NEW OFFICE – 111 Triad Center West, O’Fallon, Mo. 63366

Phyllis and Evelyn

The Affordable Care Act: Attainable Coverage for Small Businesses

Under the Affordable Care Act, small employers will have more options than ever when it comes to health insurance.

The Affordable Care Act: Attainable Coverage for Small Businesses

By SBA Region 7 Administrator Patricia Brown-Dixon

America’s 28 million small businesses are the backbone of our economy, creating two out of every three net new jobs and employing half of America’s workforce. From mom-and-pop stores and restaurants, to high-tech startups and productive manufacturers, 115,038 small businesses are helping to drive Missouri’s economy and create jobs in our local communities.
Many small business owners consider their employees to be part of their family, and providing benefits such as health care is one important tool they have to help retain their talented workforce and compete for skilled employees.  But even though many businesses want to offer their workers health insurance, in the past they have often been unable to afford it, for reasons like steadily climbing rate increases and limited coverage.

The U.S. Small Business Administration (SBA) is committed to giving small business owners the resources they need to start and grow a business– including access to critical information about how the Affordable Care Act is opening up better health care options for small business owners and entrepreneurs.

Under the Affordable Care Act, small employers will have more options than ever when it comes to health insurance.  As these provisions continue to go into effect in the next several years, it’s important for small business owners to stay informed about what they need to do to comply with and take advantage of the Affordable Care Act.

First, starting January 1st, 2014, small businesses with generally up to 50 full-time equivalent employees will be able to purchase health insurance through the online health insurance marketplace for small businesses, known as SHOP.

The SHOP Marketplace will offer employers a choice of qualified health plans from different private health insurers and make it easier for employers to make side-by-side comparisons between these plans, based on price and benefits.

SHOP also offers employers and their employees access to health insurance plans that must include a package of “Essential Health Benefits” like coverage for doctor visits, preventive care, hospitalization and prescriptions.  Many small employers may be eligible for tax credits of up to 50% of their premium costs if they choose to purchase coverage through SHOP.

Enrollment in the federal SHOP marketplace, operated by the U.S. Department of Health and Human Services, starts on October 1st for coverage beginning January 1, 2014.Information on how the law affects your business, and instructions on how to preview the health insurance policy offerings in SHOP when they are ready on Oct. 1, are available via a new, streamlined web tool for businesses housed at Business.USA.gov/healthcare.

The Affordable Care Act calls on all employers that are covered by the Fair Labor Standards Act (generally, those firms that have at least one employee and at least $500,000 in annual dollar volume of business), to notify their employees about the coverage options available to them through the health care Marketplace, whether or not the employer currently offers health coverage.  Employers are required to  provide this notice to all current full-time and part-time employees by October 1, 2013, as well as all new employees at the time of hire beginning October 1st.

The Affordable Care Act allows small employers to offer health coverage in a way that makes sense for their business and works for their bottom line, and the SBA is committed to leveraging our resources and federal partnerships to connect you with the facts and resources you need to understand the law.

To learn more, contact the SBA St. Louis District Office at 314-539-6600 or visit the website at http://www.sba.gov/mo/stlouis.

Performing Artists, Film Production, and entertainment industry tax return issues

Tax Information and Issues for Actors and others in the entertainment industry        

Actors, singers, dancers and other performers in the entertainment industry face many challenges when trying to prepare their tax returns and what qualifies as a deduction. There are many common mistakes actors make when it comes to appropriate tax write offs. Following are general guidelines, but always check with a certified tax preparer because tax codes change frequently. Don’t make the mistake of listening to your fellow actors on what you can write off. Unfortunately, the Internal Revenue Service might have a differing opinion–and that opinion prevails at audit time. The reason to keep good records and receipts is in case you are audited you are fully prepared with everything you need to fight for your deductions. Also, keeping good records does a whole lot more for you in an IRS audit: It validates the time, effort, energy and money you put into your career. Auditors tend to think that performing artists will be scattered and unorganized, and when you come in like an efficient business person, their attitude towards you changes in a positive manner. It is vitally important to keep excellent tax records and do it on a regular basis. This means keeping every receipt you plan on deducting. The reason is, if you are ever audited the absence of records and receipts could potentially cost you thousands of dollars. But, a bigger reason is, that if you do not keep good records, you are very likely to cheat yourself out of income from deductions you could rightfully claim. The most important thing for you to do is keep track of your income and expenses; you can always hire someone to professionally prepare your tax forms. But, good tax preparation and recordkeeping  is crucial. Even the best tax professionals cannot save you money or keep you out of trouble if you don’t have good records. Make it a habit of having your records well organized with your receipts and ledgers easily accessible. Create a ledger on your computer as well as keeping a hard copy as a backup. It must show the date of the purchase, the purchase amount, and the business purpose. A business log can be a record of your choosing. There are record-keeping systems which are designed just for actors. Or, you can make notes in your daybook, calendar, and notebook – whatever works best for you. Go to an office supply store and buy a large accordion-style file box with as many individual slots you will need. Then label the slots by categories listed below under deductible expenses. On a weekly or monthly basis list your expenses in your ledger and put the written receipts into the appropriate slots. If you are using credit cards, it is a good idea to use one credit card for business use only, so that everything charged to it is business-related. Don’t forget to write purchase details on the back of the credit card slips. You are the CEO of your business and that includes being in charge of the “Accounting Department.” Stay on top of your tax records and remember show business is two words. Being a great business person will help you get the most out of your deductions and be prepared in case you are audited by Uncle Sam.

Independent Contractor vs. Employee

1099MISC   Independent contractors get paid by cash or check with no withholding of any kind. This means that you are responsible for all of the Social Security and Medicare normally paid or withheld by your employer.    Independent contractors will file a “Schedule C” as part of their regular 1040 income tax form (this is where you report all the 1099’s you received last year). The performer may also file form 8829 for the home office deduction and will be required to pay self-employment tax (Schedule SE) on their net income (profit) as well as federal income tax. All these forms are part of the year-end 1040 income tax filing. The self-employed performer will also usually be required to pay estimated quarterly taxes on Form 1040-ES (if the tax liability is to exceed $1,000). The performer may also have W-2 income from union jobs where taxes are taken out of your paycheck. On W-2’s you might often have extensive expenses that will be deducted on Federal Form 2106. This means that a performer with BOTH W-2 and self-employment income will have to separate or allocate expenses between the two types of income:     Wage Employment    and    Self-employment

 

**Expenses of Certain Performing Artists
If you are a performing artist, you may qualify to deduct your employee business expenses as an adjustment to gross income rather than as a miscellaneous itemized deduction. To qualify, you must meet all of the following requirements.
1.       During the tax year, you perform services in the performing arts as an employee for at least two employers.
2.       You receive at least $200 each from any two of these employers.
3.       Your related performing-arts business expenses are more than 10% of your gross income from the performance of those services.
4.       Your adjusted gross income is not more than $16,000 before deducting these business expenses.
Special rules for married persons. If you are married, you must file a joint return unless you lived apart from your spouse at all times during the tax year. If you file a joint return, you must figure requirements (1), (2), and (3) separately for both you and your spouse. However, requirement (4) applies to your and your spouse’s combined adjusted gross income.

Common Questions

Is my clothing tax-deductible?

This is one of the first things an IRS auditor will look at and might draw attention to possible other deduction mistakes. The Internal Revenue Code states, “Clothing is considered to be a personal expenditure if it is suitable for street wear.” Even though you have purchased clothing for audition purposes only if you can wear it any other time then it is not deductible. Wardrobe deductions are largely limited to true costumes: a police officer’s uniform, surgical scrubs, a clown outfit, historical period pieces, etc. Formal wear, for both sexes, is also generally deductible. If you purchase such an outfit take a digital photo of it to document its character and keep the receipt. However, you can deduct the cost of dry cleaning or repairs to clothing you wear to an audition or a performance.

Are business gifts deductible?

You can deduct business gifts in the amount of $25.00 per person, per year. The law does not limit, of course, the amount of the gift–but only the first $25.00 for each person is deductible. On your receipt make note including date of purchase, item description, name of the person receiving the gift and the business relationship/reason. Don’t forget your agent who works very hard for you and loves to receive gifts!

What meals can I deduct?

Personal business meals which do not involve other people are only deductible when overnight travel is involved, or if you must travel to a different metropolitan area even if you do not stay overnight. If you go from Orlando to Oviedo you cannot deduct your meal. But, if you went from Orlando to Tampa then you can. However, business meals, where you pay for someone else’s meal are deductible. Here are some of the reasons on deducting business meals. You must have a receipt showing date and time, who was present, amount of the bill and business purpose. Business MUST be discussed at the meal–not before or after. In addition, the meal must take place in an atmosphere conductive to business–any restaurant or even a night club will suffice. And the expenditure must not be “lavish.”

Meals when a group of actors get together and discuss career paths, agents, etc. are far less clear cut. All business expenditures have to meet the test of being ordinary and necessary, and the tax courts have ruled that business meals shared by colleagues are not necessary. This becomes particularly true if the meeting is regular, and people take turns paying. Limit such “colleague” meals, and always explicitly note the business purpose on the receipt. Remember that only 50% of all meals are deductible.

Can I deduct my gym membership?

Body image is an important and integral part of an a performers image, and staying in good shape is important to a career in the performing arts. Most gym and workout costs are considered to be personal expenditures, and therefore are NOT deductible. In case of a special circumstance where it is required for you to “buff up” for a project and the producers do not pay for this cost then you can deduct the fees paid to a gym and/or personal trainer.

What personal grooming costs are deductible?

Everyday cost for makeup and routine haircuts and/or or color are personal expenses and are not deductible. If you have to change your hair cut and/or color for a specific audition or role then the costs relating to a specific incident is deductible. Theatrical makeup is deductible, because it is not normally used as street wear. If you pay a makeup artist for a headshot session or an audition, that specific set of costs is deductible. Manicures and pedicures are not deductible unless you are a hand model or a foot model with a specific audition or booking that would qualify as a deduction.

Can I deduct admission to movies and plays?

This can be a gray area to the IRS so it is extremely important to keep good records. Always keep a written receipt and/or ticket stubs. Staple them to a sheet of paper, and next to the ticket, put a solid business reason why you saw that particular movie such as observing the director’s dialogue technique or researching current trends. The IRS is not keen on allowing movie or theatre admissions as a deduction, but with good records and good reasons, they will. You need proof you are going to see movies and theater as part of your job and not entertainment. They also are not fond of cable and satellite costs too –but you can argue for taking the deduction. Don’t claim your full bill as a business expense. Take a reasonable percentage as business and the balance as personal. Much more than 50% tends to make auditors not agree with your reason on why you deserve the deduction.

What are allowable mileage and transportation deductions?

Your car is a major source of expense as well as a major source of tax deductions and is probably one of the most common deductions for performers.  You do not have to have receipts for mileage, but you must have good records.  This means keeping a mileage log. Thanks to technology you can download an App* to keep track of your mileage. By keeping a log it will dramatically increase your possible deductions, because you won’t overlook miles driven for business – and you will have the necessary records if you are required to produce them.  You cannot deduct personal miles such as driving back and forth to your day job.  But, going from your day job to an audition is.  Any trip you take to pursue work should be deductible.  This includes auditions, call-backs, casting visits, trips to acting classes, appointments to see agents and managers, to the post office to mail submissions, etc.

Also keep a record of your total mileage for the year. Make an odometer note on January 1 and again on December 31st.

What are deductible expenses?

The goal is first and foremost to lower your taxes!  The performing artist has a number of tax deductions that are unique.

For the IRS, all deductible business expenses are those that are:

  1. Incurred in connection with your trade, business, or profession
  2. Must be “ordinary” and “necessary”
  3. Must “NOT be lavish or extravagant under the circumstances”

Business related expenses include:

  • Advertising and Publicity: Headshot sessions and reproductions, business cards, stationery, postcards, professional registries (i.e. Actors Access), demo reels, website development and hosting fees.
  • Apparel: Uniforms, costumes, special shoes (not suitable for street wear) theatrical makeup and wigs. Cleaning, alterations and repair of work-related apparel.
  • Auto/transportation expenses: Keep track of your round trip mileage to auditions and receipts for airfare, bus, car rental, lodging, parking, taxi and subway fare.
  • Equipment: Equipment can include computers, printers, ear prompters, etc. Equipment purchased is generally “depreciated” and written off over five to seven years. These “depreciable lives” are defined in the IRS code. The IRS also allows taxpayers up to a certain amount to write off and depreciate the full cost of the purchase in one tax year instead of a longer time span. Discuss with your tax preparer how much your equipment is used for personal and business use and what is the best way for you to take your deductions.
  • Gifts: Business related. Only $25.00 per year per person is deductible.
  • Home Office: If you use a room (or rooms) in your home exclusively for your business you will probably qualify for a home office deduction. The room can be a rehearsal space, teaching space, home recording and/or video studio, record keeping for the business, marketing, etc.

The home office deduction utilizes a formula based on the square footage of the business portion (the home office) of your home vs. the total square footage of the house or apartment and applies that percentage to all associated costs. The costs could include apartment rent, mortgage interest, real estate taxes, condo fees, utilities, insurance, repairs, etc.    New for 2013: “Safe Harbor Method” allows $5 per sq ft up to $1,500 maximum

  • Legal and professional fees: Commissions to agents and/or managers, attorney fees, tax preparation, required licenses, union and professional dues for organizations.
  • Meals: Necessary business related meals are 50% deductible. They must include direct business discussions. They can include breakfast, lunch or dinner meetings with agents, fellow actors or performers, directors, film & producers, etc. If a direct business purpose were documented then the deduction would be allowed.
  • Training: Acting, voice, dance lessons, or other education related to improving or maintaining your performance skills. This also includes rental fees for rehearsal space.
  • Supplies: Ink cartages, headshot reproductions, mailing supplies, make-up, fax and photocopy fees, postage and subscriptions to industry publications.

*

https://play.google.com/store/apps/details?id=com.esocialllc.vel&hl=en

http://www.trackmymileage.net/

https://play.google.com/store/apps/details?id=com.zonewalker.acar&hl=en

https://itunes.apple.com/us/app/milebug-mileage-log-expense/id288376848?mt=8

 

Written by:Traci Danielle; Brevard Talent Group

http://www.brevardtalentgroup.com/greenroom/Tax-Information.pdf

modified by Phyllis Smith; Smith Tax and Bookkeeping Service

 

Simplified home-office deduction safe harbor announced

 BY SALLY P. SCHREIBER, J.D.            JANUARY 15, 2013         http://www.journalofaccountancy.com/news/20137191.htm

On Tuesday, the IRS released Rev. Proc. 2013-13, which gives taxpayers an optional safe-harbor method to calculate the amount of the deduction for expenses for business use of a residence during the tax year under Sec. 280A, beginning with the current tax year.

Individual taxpayers who elect this method can deduct an amount determined by multiplying the allowable square footage by $5. The allowable square footage is the portion of the house used in a qualified business use, but not to exceed 300 square feet. The maximum a taxpayer can deduct annually under the safe harbor is $1,500. The IRS may update the $5 allowance from time to time.

Electing the safe-harbor is done on a timely filed original tax return (instead of on Form 8829,Expenses for Business Use of Your Home, which is used for the actual expense method), and taxpayers are allowed to change their treatment from year-to-year. However, the election made for any tax year is irrevocable.

No depreciation is allowed for the years in which the safe harbor is elected, but it is permitted in the years in which the actual expense method is used. The revenue procedure has detailed examples of how depreciation is calculated in a year subsequent to a year the safe-harbor method is used.

To use the sale-harbor method, taxpayers must continue to satisfy all the other requirements for a home-office deduction, including the requirement that the space in the residence used as an office be used exclusively for that purpose and the limitation that an employee qualifies for the home-office deduction only if the office is for the convenience of the taxpayer’s employer.

The deduction under the safe-harbor method cannot exceed the amount of gross income derived from the qualified business use of the home minus business deductions, and a taxpayer cannot carry over any excess to another tax year. If a taxpayer uses the actual expense method for calculating the deduction and has had his or her deduction limited by the gross income limitation in that year, the taxpayer can deduct this amount in the next year he or she uses the actual expense method, but cannot use the disallowed amount in a year he or she elects the safe harbor. This limit on carryovers for the safe-harbor method means taxpayers must be careful before electing it to be sure they will not lose any of their deduction.

Taxpayers sharing a home (for example, roommates or spouses, regardless of filing status), if otherwise eligible, may each use the safe harbor method provided by the revenue procedure, but not for qualified business use of the same portion of the home. The revenue procedure contains detailed rules for use of the home for part of the year. It allows taxpayers who have a qualified business use of more than one home for a tax year to use the safe harbor for only one home, but it permits them to use the actual expense method for the other homes.

Sally P. Schreiber (sschreiber@aicpa.org) is a JofA senior editor.

 

www.healthcare.gov/using-insurance/employers/small-business/index.html

http://www.healthcare.gov/using-insurance/employers/small-business/index.html

Small businesses may qualify for tax credits that make it more affordable to provide health insurance to their employees. They also have some unique rights and responsibilities. Learn more here.

 

What is considered a small business?

In general, you are considered a small business if you have up to 50 employees. In some states, this will include you if you are self-employed with no employees. Contact your State Department of Insurance to find out whether this applies in your state.

Can I get tax credits for providing insurance to my employees? 

If you have up to 25 employees, pay average annual wages below $50,000, and provide health insurance, you may qualify for a small business tax credit of up to 35% (up to 25% for non-profits) to offset the cost of your insurance. This will bring down the cost of providing insurance.

Starting in 2014, the small business tax credit goes up to 50% (up to 35% for non-profits) for qualifying businesses. This makes the cost of providing insurance even lower.

Do I have to provide health insurance to my employees?

The Affordable Care Act does not require employers to provide health insurance for their employees.

The Employer Responsibility provision of the Affordable Care Act applies businesses with more than 50 full-time workers. To learn more read the Employer Bulletin on Automatic Enrollment, Employer Responsibility, and Waiting Periods.

What should the health insurance I offer to my employees cover?

It depends–states vary on what they require insurers to cover in small employer plans.Contact your State Department of Insurance for more information about small employer coverage requirements in your state.

What should I know when I am looking for health insurance for my employees?

If you are a small employer with 2-50 employees, health insurance companies cannot turn your business down based on the health status of your employees or their family members. This rule applies when you initially apply for small employer coverage and if you decide to change plans.

An insurer must also accept everyone in your group. Employees or family members (if you offer dependent coverage) with health conditions cannot be excluded from coverage.

Health insurance companies must sell you any small employer health plan they sell to other small employers in your state.

Contact your State Department of Insurance to learn more about your rights to getting and keeping small employer coverage.

What health insurance alternatives are available to my employees through the new law?

Starting in 2014, small businesses with generally fewer than 100 employees can shop in anAffordable Insurance Exchange—a new, transparent, competitive marketplace where individuals and small businesses can buy affordable, qualified health benefit plans. This gives small businesses power similar to what large businesses have to get better choices and lower prices for employee coverage.

Exchanges will offer more choices of high-quality coverage and lower prices.  Exchanges will offer a choice of plans that meet certain benefits and cost standards.

  • Small businesses will benefit from insurance with lower administrative costs compared to the choices available in the small business market today because they will be able to pool together.
  • Limits on insurance rating, such as no more rating based on employees’ health status or gender, will lower premiums for many small businesses.
  • The small business tax credits and the new competition promoted by Affordable Insurance Exchanges will help keep the cost of insurance down.

Do I have to pay more based on the health status of my group?

Most states, but not all, limit how much premiums can vary due to employees’ health status and other factors. Even within these limits, premiums can be significantly higher if someone in a small employer plan has a serious health condition.

Contact your State Department of Insurance for more information about small employer rating rules in your state.

Under the Affordable Care Act, this will change.  Starting in 2014, insurers won’t be allowed to charge more based on the health status of your group or the gender of your employees. There will also be limits on how much premiums can vary based on age.

Can an insurer cancel my small employer plan because one of my employees gets sick?

No, your insurance for the group (or for any member of the group) cannot be canceled because someone in your group becomes sick. This is called “guaranteed renewal.”

Do I have to report the cost of insurance in my employees’ W-2 forms?

Employers do not have to report the cost of insurance on employee W-2s in 2011. This reporting is optional in 2011.

The reporting requirement is intended to be informational and provide employees with greater transparency into health care costs. The amounts reported are not taxable.

Learn more about the W-2 reporting deferral from the IRS.

The Affordable Care Act and Small Business

Myth vs. Fact- Myth #1: All Businesses Will Be Required to Provide Health Insurance to All of Their Employees

http://www.sba.gov/community/blogs/community-blogs/health-care-business-pulse/myth-vs-fact-myth-1-all-businesses-will-b

by Meredith K. Olafson, Meredith K. Olafson is Senior Policy Advisor for the U.S. Small Business Administration

February 20, 2013, 4:00 pm

As a business owner, it’s important to understand how the Affordable Care Act can affect your business. However, with so many misconceptions about how the Affordable Care Act works, this can be difficult.  To clarify the myths versus facts, we’re launching a new blog series called “Myth vs. Fact: The Affordable Care Act and Small Business”.

This blog covers one of the most common myths we’ve seen out there:

Myth: All businesses will be required to provide health insurance to all of their employees.

Fact: Employers are not required to provide coverage to their employees under the Affordable Care Act.  However, starting in 2014, some businesses that do not offer health coverage to their full-time employees may be subject to a shared responsibility payment under the health care law.

How do I know if I may be subject to an Employer Shared Responsibility Payment?

Businesses with 50 or more full-time or full-time equivalent (FTE) employees that do not offer affordable health insurance that provides a minimum level of coverage to their full-time employees (and dependent children under the age of 26 starting in 2015) may be subject to a shared responsibility payment if at least one of their full-time employees receives a premium tax credit in an Affordable Insurance Exchange, or Marketplace.   For the purposes of these provisions, a full-time employee is one who is employed an average of at least 30 hours per week.

Businesses will not be affected by these provisions if they already offer affordable health coverage that provides a minimum level of coverage to their full-time employees, which is the vast majority of these businesses.

Businesses with fewer than 50 full-time or FTE employees are generally not affected by these provisions.  However, it’s important to know that if companies have a common owner or are otherwise related, their total combined number of employees is used to determine whether each separate company is subject to these provisions — even if none of the member companies individually employ 50 or more full-time or FTE employees.

How can I find out if I meet the threshold number of 50 or more full-time or FTE employees?

To assist employers, the IRS has developed a helpful set of Q&As on the Employer Shared Responsibility provisions. The IRS has also issued a set of proposed rules   relating to the Employer Shared Responsibility provisions, and is accepting written or electronic comments by or before March 18, 2013.

Understand the Affordable Care Act as a Small Business Owner

What does the health care law mean to you? Check out these resources that explain the key provisions of the law plus an overview of what is changing and when.

For a clear overview of how the law impacts small businesses, the Small Businesses and the Affordable Care Act guide breaks down the top things you need to know, including information about the following:

The Small Business Tax Credit and your eligibility to claim it.

Affordable Insurance Marketplaces, known as the Small Business Health Options Program (SHOP), will open on January 1, 2014 and give small employers buying power—similar to what large businesses have to get better choices and lower prices.  The SHOP Marketplaces will work with new insurance reforms and tax credits provided by the Affordable Care Act to help lower barriers to offering health insurance that small employers face.  Visit Healthcare.gov’s small business landing page for the latest information on SHOP, and review the get-ready checklist for small business owners.  Enrollment in SHOP begins on October 1, 2013.

This useful Small Business Q&A also helps you understand your rights and responsibilities as a small business owner.

Find Healthcare Insurance Options for Your Small Business

Looking for insurance for yourself or your employees? Healthcare.gov’s Insurance Finder organizes and presents information and pricing collected from insurers to help you better understand your options. Enter some basic data and the tool will filter your options accordingly.

http://www.sba.gov/community/blogs/online-tools-help-you-find-and-price-small-business-health-care-insurance-options

www.sba.gov/healthcare

Healthcare.gov

 

Strategies to Max Out Social Security Benefits

Which Social Security claiming strategy will pay the most over a lifetime:

Much of my mail these days seems to start with the same warm greeting: “What planet are you from?” That’s invariably the case when I suggest that readers consider ways to maximize Social Security benefits instead of grabbing a check at age 62, as about half of all retirees do.I know: Waiting to claim Social Security until your mid-60s or later isn’t easy. Many people need the cash, are fearful that the program might change (or collapse), or are trying to avoid tapping their savings for as long as possible. But two trends make this a good time to look at “claiming strategies” for Social Security and help illustrate just how much money is involved.

First, a recent report from the Census Bureau highlights a startling fact: The 90-plus population is projected to quadruple in size between now and 2050 — meaning that living into your tenth decade is something to factor into Social Security planning. Second, a growing number of Web-based tools now allow you to run dozens of possible claiming strategies — and can recommend how to maximize benefits.

For the examples below, I asked the folks at SocialSecuritySolutions.com in Leawood, Kan., for help; I like that the company’s lead researcher, Baylor University finance professor William Reichenstein, has written extensively about how best to tap nest eggs. (Using the site’s tool runs between $20 and $125, depending on how much personal attention you want interpreting your report.) Given the stakes, I suggest comparing results from a few different sites. You’ll find free tools at the Social Security Administration‘s site, Aarp.comand AnalyzeNow.com; another site, MaximizeMySocialSecurity.com, charges $40.Now some numbers. First, we need a way of measuring why one claiming strategy might be better than another. I’m going to use cumulative lifetime benefits as a yardstick. In other words, I want to see, given a specific starting age and life expectancy, which claiming strategy will pay me and a spouse the most money over a lifetime (or, considering there are two of us, lifetimes). You also could look at monthly income, but it can be misleading. More on that in a moment.

We’ll start with a simple example. Joe and John can begin collecting $1,500 monthly from Social Security at age 62, or $2,640 a month at age 70. Let’s say both live to 92. If Joe claims benefits at 62, his lifetime total will be $540,000. If John waits until 70, he’ll net $696,960 — almost $157,000 more.

If you look solely at monthly income, claiming benefits at 62 looks smart; Joe is getting $1,500 a month for eight years, and John is getting zilch. But again, “longevity risk should be part of your planning,” says William Meyer, founder and managing principal of Social Security Solutions. What are the odds that you will live to 85 or 90 — or longer? The answer for many: increasingly good.

Now let’s look at a husband and wife: Bob and Carol, ages 62 and 58. Bob is scheduled to receive $2,000 at his full retirement age of 66, while Carol is scheduled to receive $1,600 at her full retirement age, also 66. Each, of course, can claim Social Security at age 62. If they do so — and Bob lives until 83 and Carol lives until 90 — their cumulative benefits will be $840,600.

But Social Security Solutions offers a more lucrative — and slightly more complex — strategy. At his full retirement age, Bob claims a spousal benefit of $800. (Yes, Social Security allows this.) Carol, meanwhile, claims a benefit (based on her earnings) of $1,200 at age 62. Finally, Bob, at age 70, switches to a monthly benefit of $2,640, based on his earnings history, a move that falls under “delayed retirement credits.” In this case, the couple’s lifetime benefits will total $1,043,520, a gain of almost $203,000 over the let’s-jump-in-the-pool-as-quickly-as-possible approach.

The other interesting piece of these two strategies: survivor benefits. If both spouses claim benefits at age 62, Carol — when Bob dies — will be eligible for a survivor’s benefit (under Social Security’s rules) of $1,650 a month. But under the second claiming strategy, she would get a survivor’s benefit of $2,640, an extra $1,000 each month.

Now, consider the options for a woman, age 60, who loses her husband. Her benefit at full retirement age is $1,400; his would have been $2,000. She could begin collecting a widow’s benefit of $1,430 at age 60. But it might be better for her to pursue a different strategy — claiming a reduced benefit, based on her earnings history, of $1,050 at age 62 and switching to a widow’s benefit of $2,000 at age 66. The difference in total benefits if she lives until age 89: an extra $112,000.

Yes, the numbers can get a little head-spinning. But I hope these examples give you an idea about how much money might be forfeited if you claim benefits early — and how many claiming options are available. I recently heard this from Mark Ellingson, a retiree in Lake George, Colo.: “Take benefits [at age 62] while you still have good health and can enjoy life.” That’s tough to argue with. But please, do consider the alternatives.

http://www.smartmoney.com/retirement/planning/strategies-to-max-out-social-security-benefits-1329243329517/

St. Charles County Job Seeker Services

http://work.sccmo.org/workforce/index.php?option=com_content&view=article&id=10&Itemid=24

Information on changing careers, resumes, interviewing, career planning, training, education, job opening, and more.

Job Search
  Information on writing a resume, cover letters, interviewing, how to research local employers, job fairs, using the internet, and more to assist you when you are ready to find the job.

Career Planning
 
  How to obtain the information you need to know before deciding on a career path and local labor market information.

Education and Training
 
  How to obtain skills required for your chosen career, things to think about before enrolling, how to pay for training and financial assistance information.

Voucher Training Provider Directory
  A list of programs approved for training under the Workforce Investment Act in Missouri.

Job Listings

Community Resources
  Information on other services to help workers.

Youth Programs
  Programs to assist those between the age of 14 and 21.