Ref: Chief Counsel Advice 201547006

Situation:  Employee A declines health insurance coverage at his work. His spouse, B, elects to cover both of them through her work and has to pay after-tax payment of $75 for her husband’s coverage. A’s employer can reimburse A $75 as a non-taxed payment to A.  IT GETS BETTER:  The CCA goes on to say that if B has to pay $175 our-of-pocket (after tax) each month, A’s employer can reimburse the full $175 tax free to A.

The CCA has seven examples of situations that the IRS has “blessed.” Please contact us if you want to discuss your own situation.

The deadline for filing Form 114 with the Treasury has been moved to April 15 (from June).  If you have foreign accounts, be sure to check with your CPA as to your need to file.  Failure to file penalties are HUGE.

Note: A six month extension to file is available if filed prior to April 15, 2016.

Source: Farm Journal, June 22, 2015 “Expect Section 179 Update Soon”

The US farm industry lobby is one of the most powerful in Congress.  Last year, they predicted the Section 179 fix by Christmas. It arrived December 19.

In this recent article, they state that indicators point towards Labor Day for news on the 2015 year.   They also indicate that this might be a two-year fix.  If so, small business across the US would at least have stability for the 2016 tax year.

We will post news as soon as we hear it.  We strongly hope that this prediction is accurate.

Keep tuned…

Reference: Surface Transportation and Veterans Health Care… Act of 2015.

This new law was signed by the President on July 31, 2015 and will change filing and extension deadlines for calendar year returns FILED IN 2017 (for the calendar year 2016), as follows:

Partnerships: Filing deadline will move to March 15 with possible extension to Sept 15.

S corporations: Same as partnerships.

C corporations: Filing deadline will move to April 15 with possible extension to Sept 15.

FinCEN reports of foreign accounts: Filing deadline will move to April 15 with possible extension to Oct 15. This extension must be filed-for on or before April 15.

Mortgage Forms 1098: GOOD NEWS! The government will require that banks and financial institutions show the address of the property securing the mortgage on the Form 1098. The new forms will also show the principal balance outstanding on the mortgage. (These new rules apply to Forms 1098 issued in 2017).

Reference: Propesed Reg Sec 1.83-2

The IRS has removed the requirement that a copy of a taxpayer’s Section 83(b) election be attached to his/her individual tax return.  This was to remove a barrier to those taxpayers e-filing their individual returns.  All other requirements of Section 83(b) remain in place.  Taxpayers may rely on these proposed regs for property transferred on or after January 1, 2015.

The Section 83(b) election is often done when an individual receives stock options from an employer which are subject to a substantial risk of forfeiture over a period of time. Example: The options can’t be exercised until the business reaches $100 million gross sales and are forfeited if the employee leaves the business.

Ref: IRS Notice 2013-54

Relief under Notice 2013-54 ended JUNE 30, 2015. That relief allowed small employers (i.e., those with few than fifty full time equivalent employees) to reimburse employees directly for health care that they obtained privately. If the employer continues such reimbursement plans, they could be subject to a $100 per day penalty ($36,500 per year) per employee.

Small employers, those not required to cover employers through ACA, are left with a few options:

1. Discontinue health care for employees completely… perhaps with an increase to employee wage rate so that they can more afford to buy coverage through the “marketplace.”

2. Buy small employer ACA group coverage through the ACA marketplace.

Call your DMD CPA professional for more information on this subject.

Ref: IRS Notice 2015-17

Good news! The IRS is suspending the penalty under the Affordable Care Act (aka Obamacare) that had been slated for 2015 when an S corporation pays health insurance premiums on behalf of its more-than 2% shareholder(s).

Until further notice, the IRS won’t charge a penalty as long as the corporation follows Notice 2008-1 and includes the premium as a fringe benefit on the shareholder/employee’s Form W-2.  (Note that the shareholder-employee takes an above-the-line deduction on his/her individual return for the premium amount).

Please contact us if you need to know how to implement IRS Notice 2008-1 for your own company.

A new California law requires all business and trust returns to be e-filed over the government secure web sites.  We will, therefore, e-file all such returns for businesses based in California.  The state sees this as a method to reduce salaries (and shifting that time to CPA firms preparing the returns).