Category: Tax Law

Independent Contractor or Employee: Here’s How You Choose

From attorney David Gair at Looper Reed, here are five of his 20 criteria to help you decide if your newest hire should be an independent contractor or an employee: “1. Instructions: If the person for whom the services are performed has the right to require compliance with instructions, this indicates employee status. 2. Training:… Read more »

Business Owners: What Keeps You Up at Night? [Poll]

Which legal issues give you the biggest headaches? While you’re thinking about your response, here are a handful of recent legal updates on these very topics: Business Formation: Key Tips for Developing Business Plans for Entrepreneurs, Investors & Business Owners – Scott Legal Services, P.C. California’s New LLC Act Adds Confusion and Effects Little Change… Read more »

Small Businesses Get One More Year to Offer Tax-Free Investments

“Among the taxpayer-favorable aspects of the American Taxpayer Relief Act of 2012, the 100 percent exclusion from gross income of gain on the sale of Qualified Small Business Stock (QSBS), provided for in section 1202 of the Internal Revenue Code, was extended for an additional year. Therefore, gain from the sale of QSBS purchased during… Read more »

Doctor, Doctor, Gimme the News: Which Healthcare Reform Laws Go into Effect Soon?

“Many employers have failed to invest much time or energy into analyzing how healthcare reform would impact their businesses, first anticipating that the Court would invalidate much or all of ACA, and then hoping for a Mitt Romney victory in November. Now that the uncertainty has been lifted, it’s time to get to work and… Read more »

Small Business Taxes: Five Ways to Prepare for Taxmageddon

The end of year is coming, and – if our representatives in Washington continue their shenanigans and political posturing at the edge of the fiscal cliff – it will bring major changes to small business tax laws. As a business owner what can you to protect your interests? Here are five considerations: 1. Convert your… Read more »

Employee Tax in 2013: Prepare for Changes in Payroll, Income, and Medicare Taxes

Happy new year? On January 1, 2013, taxes go up for most employees, and the burden is on employers to make sure the money gets to Uncle Sam. That leaves just one short month to prepare for these three changes: 1. Expiration of the payroll tax holiday: “The 2 percent payroll tax cut enjoyed in… Read more »

Tax News: Want to Help Sandy Relief Efforts? Here Are 3 Tax-Exempt Ways

“Because Hurricane Sandy has been designated a qualified disaster for U.S. federal tax purposes, certain payments made by employers and others to assist disaster victims will be considered qualified disaster relief payments and thus can be excluded from taxable income.” (Proskauer) Employers and small business owners who help victims of Hurricane Sandy deserve a break,… Read more »

Written Any Severance Checks Lately? You May Be Entitled to a Tax Refund

Employers in Kentucky, Michigan, Ohio, and Tennessee who have withheld FICA tax on severance payments made in connection with layoffs or plant closings might be getting some money back from the IRS. Law firm McDermott Will & Emery: “The U.S. Court of Appeals for the Sixth Circuit recently held that certain dismissal payments were Supplemental… Read more »

When Is a Tip Not a Tip? When the IRS Says So…

Here’s a tip: restaurants that tack a fixed charge on certain bills must begin withholding additional taxes on those amounts. Known as “auto gratuities,” compulsory service charges paid by diners should be considered employer-paid wages—not tips—and treated accordingly for tax purposes. Law firm Pillsbury: “Employers are required to collect income tax, employee social security tax… Read more »

IRS COBRA Audits Likely to Increase: How to Prepare

Employers who sponsor group health plans, take note. If your business is subject to COBRA coverage (essentially all companies with more than 20 employees are), you could be the target of an Internal Revenue Service audit into your COBRA compliance. Fortunately, earlier this year the IRS published revised guidelines for such audits, providing employers with… Read more »

Still Working on Your Small Business Taxes? These Updates Might Inspire You

The old adage “time marches on” never seems more true than during tax season, especially during the last weeks when your docs are due.For small business owners and entrepreneurs still scrambling to complete their taxes, this roundup of legal advisories might help: New IRS Requirements for Electronic Furnishing of Schedules K-1 (Ropes & Gray LLP)… Read more »

8 Small Business Tax Law Changes That Could Help You Save More

The Small Business Jobs Act and the Tax Relief Act (both of 2010) might be more than a year old, but they can still help small business owners save money on their 2011 taxes. For your reference, here are eight changes from those laws that you should consider when preparing and filing your business return:… Read more »

Employer Health Care & W-2s: Mandatory Reporting of Costs in 2013

Under the Patient Protection and Affordable Care Act, in 2013 employers must begin reporting “aggregate costs” they pay for employee health coverage on the individual W-2 Forms of those employees. For your reference, five takeaways from the recently published Internal Revenue Service guidance on the reporting requirement: On Aggregate Costs… “‘Aggregate cost’ is the total… Read more »

PPACA: Reporting Employer Healthcare Costs

Under the Patient Protection and Affordable Care Act, in 2013 employers must begin reporting “aggregate costs” they pay for employee health coverage on the individual W-2 Forms of those employees. Morgan Lewis’ comprehensive overview of recently issued Internal Revenue Service guidance on the reporting requirement provides a useful resource for employers: “The Affordable Care Act… Read more »