Tax Update for by Lisa Contreras, CPA.

Transcription

1 Tax Update for 2015 by Lisa Contreras, CPA

2 Overview Fixed Asset Regulation Reminders Health Insurance Reporting Requirements Surface Transportation Act of 2015 Other Tax Matters Things to Remember 2

3 Let s Dive In!! 3

4 Fixed Asset Reminders - De Minimis Rule Applicable Financial Statement (AFS) Taxpayers Update your fixed asset capitalization policy if needed: Must be written Must be effective as of January 1st Up to $5,000 per invoice/per item limit Book and tax capitalization thresholds are the same 4

5 Fixed Assets Repair Regulations - Repair vs Improvement Look to Unit of Property (UOP) to determine if an expenditure is a: Betterment Restoration Adaptation Building structure-subsystems are separate UOP Tax does not have to follow GAAP Retirement of Structural Component of a building 5

6 ACA Reporting - Don t be Caught Off Guard 6

7 Health Insurance Reporting Requirements Requirement of Affordable Care Act (ACA): Ensures minimum essential insurance is offered by employers. Filing in Spring 2016 for 2015 calendar year Who is required to file: All applicable large employers (ALE) with 50 or more Full-Time Equivalents (FTEs) FTE = 30 hours per week 2015 transition relief from penalties for ALE with FTE, but still must file All employers offering self-funded plans 7

8 Health Insurance Reporting: Affordable Insurance Coverage is deemed affordable if: Safe Harbors: Cost to employee for self-only coverage does not exceed 9.5% of W-2 Box 1 wages, Rate of Pay, or Federal poverty level The method cannot be changed when selected and must use it to measure for all employees. Future planning opportunities: in general, the W-2 safe harbor results in the employee paying the maximum contribution amount. 8

9 Health Insurance Reporting: Minimal Essential Coverage Coverage meets essential coverage if plan pays minimum of 60% of total costs for a standard group Does not include HRA, HSA, or FSA (1094/1095 filing not required) These plans do not provide essential coverage Individual not exempt from individual mandate penalty Penalty for employer payment arrangement plans HRA that allows for reimbursement for the insurance premium Penalty is $100 per day per employee 9

10 Health Insurance Reporting: Which Form to Use? Forms 1095 and : Sent to employee by January : Transmittal / Cover Page to 1095; due Feb. 28 or e-file by March 31 Two types for businesses: B & C B used by insurance companies and self-insured small employers (for insured plans, insurance company should file returns) C used by all ALEs 10

11 Health Insurance Reporting: Form 1095 Form 1095 sent to Employee (file even if no health coverage offered) Lists covered individuals (employee and any dependents) SSN or, at minimum, date of birth By month Coverage offered Cost Safe harbor code (if applicable) for employer penalty Form 1094 sent to the IRS Employer information Number of 1095-Cs to transmit By month Check if minimum essential coverage offered Number of employees Number of FTEs If part of a larger group (control group), list employer information of others in the group 11

12 Health Insurance Reporting: Penalties Not Tax Deductible Penalty A Does not offer coverage OR offers coverage to less than 95% (70% in 2015) of its FTEs AND one employee receives a premium tax credit For 2015 (FTE 80) x $2,000; after 2015 (FTE 30) x $2,000 Penalty B Offers coverage BUT full time employee receives premium tax credit because coverage was not affordable or was inadequate Lesser of Penalty A OR $3,000 x Subsidized FT Failure to file penalty $250 per form Transition Relief for small ALE for 2015 only (50-99 FTE) no penalty A or B 12

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14 Surface Transportation Act of 2015 New Tax Return Due Dates (generally effective for 2016 tax returns) Return Type Partnership Form 1065 S Corporation Form 1120S Original and Extended Due Date April 15 Sept 15 March 15 Sept 15 New Original and Extended Due Date March 15 Sept 15 March 15 Sept 15 Before 12/31/2015 After 12/31/2015 C Corporation (Calendar Year) March 15 Sept 15 April 15 Sept 15 April 15 Oct 15 14

15 Surface Transportation Act of 2015 (Continued) New Tax Return Due Dates (generally effective for 2016 tax year returns) Return Type Original and Extended Due Date New Original and Extended Due Date Trust and Estate Form 1041 April 15 Sept 15 April 15 Sept 30 FinCEN Report 114 June 30 April 15 Oct 15 15

16 Surface Transportation Act of 2015 (Continued) New Mortgage Reporting Requirements Effective for due dates after December 31, 2016 Additional Reporting on Form 1098: Outstanding principal balance Address of property Loan origination date 16

17 Timely Filed Returns Considered timely filed if postmarked by the document s due date using an authorized delivery service provider UPDATED list of acceptable delivery service providers (per Notice ) US Postal Service Federal Express FedEx First Overnight FedEx International Next Flight Out FedEx Priority Overnight FedEx International Priority FedEx Standard Overnight FedEx International First FedEx 2Day FedEx International Economy UPS UPS 2 nd Day Air UPS Next Day Air Early AM UPS 2 ND Day Air AM UPS Next Day Air UPS Worldwide Express Plus UPS Next Day Air Saver UPS Worldwide Express 17

18 Other Tax Matters Increased Form 1099 reporting penalties Failure to file correct returns Failures that are corrected within 30 days Failures corrected after 30 days but before Aug. 1 Current Penalty per Form $100 $250 $30 $50 $60 $100 New Penalty per Form 18

19 Other Tax Matters (Continued) New IRA developments Current rule: tax free treatment if an IRA distribution is rolled into IRA within 60 days. New Requirement: limited to one rollover within in any 12 month period. Starting in 2015, the one IRA rollover per year limit applies globally to ALL traditional IRAs owned by an individual (i.e. only one rollover for all IRAs will be allowed within a 12 month period). 19

20 Other Tax Matters (Continued) Form 1099-C For discharge of debt Must be issued in the year the debt was discharged IRS Status Budget cuts have negatively impacted IRS services: Fewer audit closures Increased nuisance notices Increased courtesy disconnects /decrease in customer service o 2014 courtesy disconnects = 544,000 o 2015 courtesy disconnects = 8.8 million (1500% increase!) 20

21 Things to Remember Depreciation No bonus or enhanced Section 179 for 2015 Congress is trying to agree on tax extenders before year-end Texas Franchise Remember to transact overnight security trades Texas legislative changes: Reduced rate of 0.75% Entity with no more than $20 million in total revenue is now eligible for E-Z Computation reduced rate of 0.331% 21

22 Questions? 22

23 Contact Information Lisa P. Contreras, CPA Padgett, Stratemann & Co., L.L.P. AUSTIN 811 Barton Springs, Suite 550 Austin, Texas HOUSTON 1980 Post Oak Boulevard, Suite 1100 Houston, Texas SAN ANTONIO 100 NE Loop 410, Suite 1100 San Antonio, Texas