Theresa Arndt, CPA

It’s coming faster than you think: the Affordable Care Act (ACA) mandate that kicks in on March 31, 2014.  On this date, the ACA will make health insurance mandatory for most Americans. Many clients are asking for advice and guidance.   So I’ve put together the basics in a question and answer format on how the law will affect your coverage, your health plan  options and your costs. When Does the Law Start? Some of the ACA’s reforms and consumer protections have already started. Most will take effect by March 31, 2014.  For instance, if you don’t have health coverage through your employer or a public plan like Medicare or Medicaid, you will need to purchase coverage by March 31, 2014 or pay a penalty.   For some requirements, the federal government has extended the deadline. For example, large employers will have to offer health coverage to their workers, or pay a penalty. Employers now have until 2015 to comply with that rule. What Coverag...

One of the top audit risks for S corporations is salary and wages paid to officers of the corporation.  S corporations have many advantages, tax and legal, as long as you follow the rules.  So if you are considering an S corporation for your business, here is what you need to know on reasonable compensation and S corporations: Reasonable Compensation The fastest way to get audited as an S corporation is to file an 1120S with no amount showing on Form 1120S Line 7 "Compensation of Officers." It is assumed by the IRS that no one works for free, and so the IRS has said over and over again that officers of the corporation must receive wages  (reported on line 7). As an owner-employee of the S corporation, you must pay yourself a salary, and pay payroll taxes on your salary, even if the business is losing money. You don't have to pay yourself a high salary, but it must be a "reasonable amount" according to the IRS. Reasonableness can be interpreted in d...