Create a tax-saving plan to reduce your 2016 tax bill.

The end of the year is the last chance for business owners to evaluate the current and future status of their operations and the associated tax implications. Businesses must understand the tax law changes that impact their industries, operations and, ultimately, their profitability. A number of tax reform proposals that directly affected businesses were passed in 2015 and 2016; however, progress on further legislation will not likely be finalized until early 2017. Therefore, business owners and their tax advisors must remain vigilant and up-to-date.

Things to keep in mind for the 2017 Tax Season:

Partnership and S-Corporation Tax Returns are due on March 15, 2017

  • We need to have your information by February 15, 2017 in order to ensure a timely filed return. Otherwise, please contact us to put you on extension.  Extension requests must be received in writing no later than March 10, 2017.

Issuing 1099s

Due by January 15, 2017

  • If you paid anyone for services in excess of $600 this year for your business, you are required to issue them a 1099-MISC. Included in this group would be any independent contractors used for your business or rental property, child care providers you pay directly and home health providers. The exceptions: the person you paid is a corporation, or you paid anyone with a credit card, you are not required to send a 1099-MISC.
  • If you paid attorneys in 2016, you must issue a 1099-MISC for any payment.
  • If you paid interest to someone that has loaned you money (The Bank of Dad?) you should issue them a 1099-INT and, if it is for a home loan, they can issue you back a 1098.
  • We would be happy to help. Fill out the 1099 Issuance worksheet and get it to us, either as an attachment or a fax. We will send them out to the recipients and file the form electronically. The fee is $30 per 1099 (charge increases to $60 after January 15th).

KEEP UP WITH AFFORDABLE CARE ACT INFORMATION REPORTING

As 2017 approaches, turning your attention to your reporting requirements under the health care law can prevent a beginning-of-the-year rush to gather information. Need additional incentive? Consider this: Though the IRS offered extended deadlines and relief from filing penalties last year, those breaks will likely not apply to this year’s returns. Here’s what to think about as you prepare for the upcoming filing season.

How many employees you have? The key here is understanding that your employee count includes full-time employees as well as full-time equivalent employees. You’re an “applicable large employer,” or ALE, if your business employed an average of at least 50 full-time employees, including full-time equivalent employees, on business days during the preceding calendar year. Special rules apply to related companies with a common owner, seasonal workers, and new employers.

What’s the definition of full-time and full-time equivalent? A full-time employee is one who works an average of 30 or more hours per week (or 130 hours per month). Full-time equivalents are determined by multiplying the number of part-time employees by average hours worked and dividing the result by the hours required for full-time status.

Example. Twenty employees working an average of 15 hours per week are equivalent to 10 full-time employees (20 employees times 15 hours divided by 30 hours).

How do you count employees? Here’s the general rule. Add the total number of full-time employees for each month of the prior calendar year to the total number of full-time equivalent employees for each month of the prior calendar year. Divide that number by 12. Is the answer fewer than 50? You’re not an ALE, and you generally have no reporting requirements. If the answer is 50 or more, you are an ALE.

The forms you’ll need to file. If your employee count reveals that you are an ALE, you’re required to file a Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, for each employee who was a full-time employee for any month of the calendar year. You’ll also have to file one or more Forms 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns. Form 1095-C informs individual employees about the health coverage offered by your business. Form 1094-C reports the summary of all your Forms 1095-C.