Employer benefits, opportunities and requirements under the health care law are dependent upon the employer's workforce size. The vast majority of employers fall below the work fore size threshold for applicable large employers.  Generally an employer with 50 or more full time employees or equivalents will be considered an applicable large employeer. Applicable large employers can find a complete list of resources and the latest news at the Applicable Large Employer Information Center on IRS.gov/aca.. If you have:

  • Fifty or more full time equivalent employees you will need to file an annual information return reporting whether and what health insurance you offered your full time employees. In addition, you are subject to the Employer Shared Responsibilty provisions.
  • Fifty or fewer employees, you are generally eligible to buy coverage through the Small Business Health Options Program. Learn more at HealthCare.gov
  • Fewer than 25 full time equivalent, you may be eligible for a Small Business Health Care Tax Credit to help cover the cost of providing coverage.


Regardless of size, all employers that provide self insured health coverage to their employees must file an annual return reporting certain information for each employee they cover

​THE NUMBER OF EMPLOYEES MATTER

From finance companies and manufacturers to teachers and working poor, there is a tax break for almost everyone in the massive package unveiled by congressional leaders. Only a few of the tax breaks are new. Most have been around for years, even decades. and are renewed every year or two, but only temporary. More than 50 of the tax breaks expired at the start of the year. The package would make more than 20 of them permanent, providing certainty to millions of businesses and individuals. The other breaks would be extended for shorter periods. The bill would save taxpayers about $680 billion over the next decade adding that amount to the national debt, according to Congressional estimates. The tax bill, as well as a government spending package also unveiled this week takes several swipes at the IRS, limiting the agency's ability to issue new rules for tax exempt groups


Business leaders have been complaining for years that they can not be certain from year to year that their tax breaks will be renewed.  The tax package was negotiated mainly by Republicans from the House and Senate and Democrats from the senate.. It is unclear how many House Democrats will support it.


IRS Commissioner John Koskinen has said the agency does not plan to finalize new rules for political groups until after next year's presidential election. The tax package would let people who live in states without income taxes continue deducting local sales taxes when they file their federal returns. College students could keep there $2,500 tax credit for school expenses. Low-income people with three or more children could continue to claim a larger Earned Income Tax Credit.  Families that do not make enough money to pay federal income tax could continue to claim larger child tax credits.  Teachers could continue to deduct up to $250 a year if they spend there own money on classroom supplies and commuters could keep getting tax free transit benefits from their employers.  


Business groups praised the package, which would continue generous  tax breaks for international finance firms, retailers and companies that spend a lot on research and development. The generous R&D tax credit has been around since the 1980's  but it has always been temporary. The bill would expand it and make it permanent. The provision would save businesses $113 billion over the next decade, making it the single biggest tax break in the package. Several provisions allow businesses to more quickly write off expenses for buying computers or equipment or to finance property upgrades 

​MASSIVE TAX PACKAGE OFFERS BREAKS

OPEC members failed to agree an oil production ceiling on Friday at a meeting that ended in acrimony, after Iran said it would not consider any production curbs until if restores output scaled back for years under Western sanctions. A final statement was issued with no mention of new production ceiling, apparently allowing member countries to continue pumping oil at current rates into a market that has been oversupplied OPEC's secretary general Abdullah al-Badri said the body could not agree on any figures because it could not predict how much oil Iran would add to the market next year, as sanctions are withdrawn under a deal reached six months ago with world powers over it s nuclear program. Most ministers left the meeting without making a comment. Iranian oil minister Bijan Zangeneh had said before the meeting that Tehran would be prepared to discuss action only when Western sanctions are lifted


Just after the most wonderful time of the year comes the most frustrating time, when you have to figure out how much you owe Uncle Sam. There are a handful of rule changes this year that may affect your income tax return.

  1. Procrastinators rejoice. The filing deadline for 2015 income tax returns is April 18, 2016. That is because the traditional April 15 deadline falls on the day commemorating Emancipation Day, the anniversary of the abolition of slavery in the  the Distict of Columbia. Emmancipation Day is a DC holiday, but the IRS treats these as federal holidays for tax filing purposes. Residents of Maine and Massachusetts get even more time. They have until April 19 to file their federal taxes. April 18 is Patriot's day a statewide holiday in both states. the IRS has previously ruled that state residents get and extra day to file taxes if the federal deadline occurs on a statewide holiday.
  2. Higher Affordable Care Act Penalties.  Those without heath insurance will have to pay a bigger penalty this year. The Affordable Care Act (ACA) requires most individuals who do not qualify for exemptions to maintain  minimum coverage or pay a penalty. For 2015, the penalty increases to $325 per adult or 2% of net household income, which ever is greater. That is up from $95 per person or 1% of net household income last year
  3. ​Two new forms Those employed by a big company, defined as at least 50 full time workers will receive a 1095-c form from their employer, The form identifies the employee and employer shows which months the employee was eligible for coverage and shows the cost of the cheapest monthly premium. If the company does not offer insurance  to its employees, the 1095-c will indicate that. If you have health insurance through a smaller employer or insure yourself, you will receive a 1095-B form, which offers more details than the 1095-c  such as who in your household is covered by the the insurance. The forms will help determine your eligibility for a premium tax credit if your company's health plan costs more than 9.56 percent of your income.
  4. New credit for cross border workers. Some taxpayers who work in one state  but live in another may get an extra tax credit this year due to the Supreme Court's ruling n Comptroller of the Treasury v Wynne. The ruling prevents a state from double taxing personal income earned by its residents in another state

4 NEW TAX RULES TO KNOW BEFORE YOU FILE

The Volkswagen owned manufacturer will create more than 1,000 new jobs at its base in Zuffenhausen in Germany where a new paint shop and assembly line will be set up to build battery powered "Mission E" model. Porsche's invesment in emissions-free drive technology reflects parent VW's growing commitment to increase its electric offerings as it struggles to overcome an emissions scandal. VW has said the next generation of its VW-badged flagship luxury saloon Phaeton will be electric and it plans to expand the so-called MQB modular production platform to focus more strongly on long range plug in hybrids and electric vehicles. Analysts have warned that VW's admission of rigging diesel emissions tests could cast a shadow over the diesel vehicle industry Porsche's Mission E model, due to come to the market by the end of the decade will be more than 600 horsepower and have a range of 310 miles



5 LITTLE KNOWN WAYS TO REDUCE SMALL BUSINESS TAXES

OPEC FAILS TO AGREE ON PRODUCTION CEILINGS

WHAT TO EXPECT FROM A FED RATE HIKE

Our mission is to keep you informed of issues which affect your economics and everyday life to enable you to sail through rough waters as smooth as possible. We are here to serve you and your business if you have one.

Taxes can be stressful for a small business owner. You likely wear many hats and the last thing you want to do is pay more of your hard earned business income to the government. Thankfully, there are many ways to reduce your taxable liability as a business owner and keep more of that revenue for your self. If you need ways to reduce your tax burden this year, consider some of the following methods to do just that.


EMPLOY A FAMILY MEMBER

One of the best ways to reduce taxes for your small business is by hiring a family member. The Internal Revenue Service allows for a variety of options, all with the potential benefit of sheltering income from taxes. You can even hire your children, at as young as seven years old. With this strategy, business owners able to pay a lower marginal rate or eliminate the tax on the income paid to their children. It is important to point out earnings need to come from justifiable business purposes. Assuming you are able to hire your child, their salary can be put into a Roth IRA for future purposes allowing you the tax benefit plus a way to provide for their future needs. The benefit does not stop with their children. The IRS also allows you to hire a spouse. Depending on the benefits they have through another job you may be able to put aside retirement savings for them, thus reducing your taxable liability.


START A RETIREMENT PLAN

As a small business owner, you give up a 401K match, You may miss the free money available through the match though there are several retirement account options that maximize retirement savings and reap valuable tax benefits. For example, with the Individual 401k, the IRS allows you to put away up to $53,000 for retirement. Some of those retirement planning vehicles are:

  1. SEP IRA
  2. SIMPLE IRA
  3. INDEPENDENT 401 K

It is important to point out, in the case of Independent 401 ks you must open them by December 31 to qualify.


SAVE MONEY FOR HEALTHCARE NEEDS

One of the best ways to reduce small business taxes is by putting aside money for healthcare needs.  Medical costs continue to increase and while you may be healthy now, saving money for unexpected future need is essential.  You can accomplish this through a Health Savings Account (HSA) if you have an eligible high-deductible health plan. Many businesses look to lower the costs of health insurance. Bu utilizing HSAs, the business and the employees can reduce taxes and potentially associated medical costs. The savings comes in three ways, otherwise known as the triple tax advantage- your contributions are pretax, they grow tax free,m and withdrawals for qualified medical expenses are tax free.


CHANGE BUSINESS STRUCTURE

As a small business owner, you do not have the benefit of an employer paying a portion of your taxes. You are on the hook for the entire amount of Social Security and Medicare taxes. Those amounts only increase an already high tax bill. If your business is taxes as a Limited Liability Company (LLC), you still have to pay those taxes. In certain circumstances, you can eliminate the employer half of those tax responsibilities. Consider converting to an SCorp


DEDUCT TRAVEL EXPENSES

If you travel alot for both business and pleasure, you may be able to reduce your business taxes. Business travel is fully deductible, though personal travel does not enjoy the same benefit. There are several ways to manage travel to save on business taxes. You can combine personal travel with a justifiable business purpose. You can also use the frequent filer miles you earn for personal travel.

​​

After seven yers of near zero interest rate the Fed is getting ready to hike the interest rate. The move is widlely anticipated after many Fed officials, including Fed Chair Janet Yellen, telegraphed confidence in improving US economic conditions " I think the economy is on the road to recovery " Yellen said at the Economic Club of Washington on December 2, 2015. She added that if the Fed waits too long to raise rated, it would likely end up having to tigthen policy relatively abruptly to keep the economy from significantly over shooting both of our goals, the Fed has a statutory mandate of both maximum employment and price stability.


The Fed's near - zero interest rate policy has fueled a massive 6 year rally in the stock market, as money searching for higher returns found a home in equities. This has enticed many companies to raise money through initial public offerings in the equity capital markets. Last year companies raked in a record $85 billion in IPO proceeds. Once the Fed increases its target for the Federal Funds rate, the yield on other short term loans will face upward pressue. This will in turn affect longer term rates, such as mortgages and corporate debt. As bonds return higher yields, they become increasingly attractive versus stocks. However, risky high yield bonds may become less attractive, as a rate hike would exacerbate the ability of companies with distressed debt to borrow money. Problemsn in this area hae already started to surface in the case of mutual fund. Third Avenue, which prevented investors from withdrawing money from its high  yield bond fund last week. The shale oil sector is also likely to face headwinds, especially because many firms are unprofitable a current opil prices. Given the high capital requirements of these companies and limited lifespan of drilling enterprise, they must issue lare amounts of debt and roll it over on a continuous basis.


Fed officials have explained that any rate increase will occur in a smooth and gradual fashion, so as to not create chaos in the markets and the economy. However, it is inevitable that the current bull market will eventually end as the Fed ratchets up rates. 



​PORSCHE TO SPEND $1 BILLION ON NEW CAR PLANT

​DECEMBER NEWSLETTER

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