Theresa Arndt, CPA

One of the fun parts about my job is finding cool tax deductions or credits that people don’t know about but can be a real tax saver.  The one I want to talk about today is called the “Missouri Income Tax Deduction for New Workers”. Notice this is a “state” tax deduction.  The thing about state deductions is that most of them won’t just pop up on your tax software.  You have to actually know about them and specifically request the forms to come up.   How sneaky is that. Here’s how it works: If you are a small business you may qualify to claim a special state tax deduction for each new job you create in 2013 and 2014. Eligible Small Business : Employ fewer than 50 full-time and part-time employees at all times during the tax year for which the deduction is taken. Eligible Employee: Completed at least 52 consecutive weeks of full-time employment (average 35-hours/week). Earned wages for the 52 week period abov...

The IRS issued  Notice 2015-17 clarifying the application of Notice 2013-54 to certain situations. The notice provides relief for employers who are not applicable large employers (ALES), as defined in §4980H. In summary, the IRS will not assess any penalties for reimbursement arrangements for 2014 through June 30, 2015. After June 30, 2015, the IRS states they may start assessing penalties. Specifically, the IRS addresses: The transitional relief through June 30, 2015. The treatment to 2% S corporation shareholders. Reimbursing for Medicare, TRICARE or Medigap. Increasing employee compensation on an after-tax basis in a way that is not tied to health insurance. Treating insurance reimbursements as taxable wages. The IRS confirmed that for the time being, they'll allow an S corporation shareholder to deduct reimbursed insurance as a self-employed health insurance under §162 (l).  The IRS has also clarified that treating insurance rei...

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...

So you’re getting a tax refund and now you want to know when to expect it.     The good news is that the IRS wants you to know as well.   There are three fast and easy ways to track the status of your refund. Go Online The IRS created “ Where’s My Refund?,” a digital tool designed to answer taxpayer questions about the status of their refund.   This year the IRS has refreshed, enhanced and polished the app just in time for the 2013 tax season, making it more automated and accurate than ever before. With “Where’s My Refund", a new progressive feature called a “refund tracker” displays the return progress in three separate stages.   Here are the three stages and the messages you may receive: 1. Return Received ·           We have received your tax return and it is being processed. ·           You should get your refund within 21 days from ...

I want make you aware of a substantial deduction that many people in the construction industry qualify for but is often overlooked by tax preparers.   Specifically, I am speaking about the “Domestic Production Activities Deduction”.   This deduction is available to all home builders and contractors regardless of what tax forms they file.    If you are a sole proprietor, S-corporation, LLC or Partnership, you can tell if you have taken the deduction by looking at line 35 of your Form 1040.   I find that nearly all of the builder’s and sub contractor’s tax returns I have reviewed have not claimed this deduction…and it can be substantial.   Personally, I think there are a couple of reasons this deduction is not being taken advantage of: ·           Some tax preparers may not be up to speed on all changing tax laws as it relates to the construction industry   ·      ...

A Jan. 18 deadline looms for about 2 million homeowners who lost their homes to foreclosure between the start of 2008 and the end of 2011. Five lenders could give each of those borrowers as much as $2,000. The National Mortgage Settlement (NMS) administrator mailed Notice Letters and Claim Forms in late September though early October 2012 to those borrowers who lost their home due to foreclosure between January 1, 2008 and December 31, 2011.   The problem is that many qualifying homeowners never received those notices because they were mailed to the address of the foreclosed home.   Therefore, they do not realize they qualify for a refund. The deadline to file a claim is January 18, 2013.   So if you lost your home between 2008 and 2011, keep reading to see if you qualify for relief, how much you might receive and how to file a claim. What is the National Mortgage Settlement? The NMS was reached last February between 49 states and the nation's five largest m...