Showing 15 posts by Joel C. Farrar.
Encourage Your Employees to Grow Your Business
You have a reason to grow your business—you’ll make more money. You also have a reason to stick around—the proverbial pot of gold at the end of the rainbow. But what about your key employees? You should consider giving them the same incentives. Read More ›
Categories: Employee Benefits, Labor Relations
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Michigan Treasury instructs same-sex couples to file separate state income tax returns
The Michigan Department of Treasury will require that same-sex couples file their Michigan income tax returns as single filers, even though same-sex couples are required to file joint federal income tax returns. Read More ›
Categories: Tax
Same-Sex Marriages Are Recognized for Federal Tax Purposes
The U.S. Department of Treasury and the IRS have ruled that, effective as of September 16, 2013, same-sex couples who are legally married in a jurisdiction that recognizes same-sex marriage must be treated as married for all federal tax purposes. Accordingly, married same-sex couples must file their 2013 federal income tax returns as either “married filing jointly” or “married filing separately.” They may also choose to file original or amended federal tax returns for 2010, 2011, and 2012 and claim refunds. Some taxpayers may be eligible to claim refunds for earlier tax years. Read More ›
Categories: Tax
Properly Document and Structure Your Professional Practice Management Fees
Dental, orthodontic, and other professional practices often use management fees to allocate compensation among professionals. This compensation strategy is sometimes tax efficient only if the management fee is tax deductible. The U.S. Tax Court recently ruled that a dental practice was not entitled to deduct purported management fees that the practice paid to a related, ESOP-owned entity because there was no indication that the entity actually performed services in exchange for the fees. Wiley M. Elick, Tax Court Memorandum 2013-139. The court also upheld the IRS's imposition of an accuracy-related penalty. Professionals who use management fees in their compensation plan should ensure that the relationship is properly structured and that services are well documented.
Categories: Income Tax
June 30 Deadline to Apply for Temporary Misclassified Worker Settlement Program
If your business may have misclassified workers as independent contractors, consider applying for the IRS's temporary Voluntary Classification Settlement Program (VCSP) by June 30th. The VCSP allows eligible taxpayers who have misclassified workers as independent contractors to prospectively reclassify them as employees pursuant to a closing agreement with the IRS. The settlement terms are generous. To qualify for the permanent program, a taxpayer must have filed all required Forms 1099 for the previous three years and must meet other requirements. The temporary version of the VCSP waives the requirement that the Form 1099 filing requirement in exchange for the taxpayer paying a larger percentage of the employment tax liability that would have been due on compensation paid to the reclassified workers during the most recent tax year and paying a reduced penalty for failing to file Forms 1099. A taxpayer may apply for the temporary program by filing Form 8952 with IRS by June 30, 2013, writing “VCSP Temporary Eligibility Expansion” across the top of the form, and striking Part V, Line A3. See IRS Annotation 2012-45 for details.
Categories: Employment Tax & Withholding
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