Brace Yourself for a Sea of Change in the Tax Law

  • July 2, 2010

A number of tax law changes are making their way through Congress, and many more on the way. These changes will affect both individual and business taxpayers alike. In 2010, it is expected that Congress will address the federal estate tax, and is currently working on small business and jobs "relief," as well as an extension of popular, but temporary tax incentives that expired at the end of 2009. This article provides a brief overview of what taxpayers can expect this year.

The IRS Initiates Project to Review 401(k) Plan Compliance

  • June 21, 2010

According to the IRS web site - 401(k) plans represent the largest retirement plan market segment and have a significant impact on the health of the private retirement system in America. Employee Plans Examinations, previously conducted a baseline study of 79 market segments, and the findings indicated that 401(k) plans are by far the most non-compliant plan type in the retirement plan universe. In an effort to improve plan compliance the IRS is sending a questionnaire to 1,200 randomly selected 401(k) sponsors that filed a form 5500 in 2007. The questionnaires were designed to assess compliance with retirement plan regulations. Plan sponsors who receive a letter will complete the Questionnaire by accessing a special Web site.

Smaller Not-for-Profit Entities May Qualify for the New Small Business Health Care Tax Credit

  • June 7, 2010

A provision of the recently enacted Patient Protection and Affordable Care Act provides a Small Business Healthcare Tax Credit. The tax credit is retroactive to January 1, 2010, and applies to certain not-for-profit entities. The credit is designed to encourage smaller not-for-profit entities with low to moderate income employees to provide health care coverage for its employees. While the eligibility rules restrict the credit to relatively small organizations with low to moderate wages, the credit can be significant and possible allow the organization to provide health care benefits when it might otherwise be unable to do so.

Q & A: How do I Claim the Small Business Health Insurance Tax Credit for 2010?

  • June 2, 2010

The small business health insurance tax credit, created by the health care reform package, rewards employers that offer health insurance to their employees with a tax break. The credit is targeted to small employers; generally employers with 25 or fewer employees. In May 2010, the IRS issued Notice 2010-44, which describes the steps employers take to determine eligibility for the credit and how to calculate the credit.

Audits of Wealthy Individuals Trending Upward, IRS Oversight Board Reports

  • June 2, 2010

The IRS Oversight Board recently released its 2009 annual report to Congress. The report evaluates the IRS's performance during the 2009 fiscal year (FY), enumerates strategic challenges affecting tax administration, and provides measures the agency's performance during FY 2009. According to the Oversight Board's report, audits of individuals with incomes above $1 million grew 29 percent in FY 2009 compared to FY 2008. However, the number of audits of wealthy individuals represented only 2.58 percent of all individual audits in FY 2009.

FAQ: What Tax Legislation is Congress Expected to Pass This Year?

  • June 2, 2010

At the start of 2010, Congress had a full tax agenda. As summer approaches, many tax bills remain unfinished, most notably an estate tax bill. Other important tax legislation is also on Congress's agenda for action before year-end. Including: Estate tax, Individual tax rates, Capital gains and dividends, Child tax credit and more.

Planning for the 3.8 percent Medicare Tax on Investment Income

  • June 2, 2010

The health care reform package (the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010) imposes a new 3.8 percent Medicare contribution tax on the investment income of higher-income individuals. Although the tax does not take effect until 2013, it is not too soon to examine methods to lessen the impact of the tax.

IRS Ramps Up Guidance On New Small Employer Health Insurance Tax Credit

  • May 3, 2010

The IRS is moving quickly to alert employers about a new tax credit for health insurance premiums. The recently enacted health care reform package (the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010) created the small employer health insurance tax credit. The temporary credit is targeted to small employers that offer or will offer health insurance coverage to their employees. The credit, like so many federal tax incentives, has certain qualifications.

IRS Issues Forms, Instructions For HIRE Act Employer Tax Incentives

  • May 3, 2010

Wasting little time in helping important business hiring, the IRS has released forms and instructions for the employer tax breaks in the Hiring Incentives to Restore Employment (HIRE) Act. The IRS unveiled new Form W-11, Employee Affidavit, which covered employees can use to certify that they meet the criteria of the HIRE Act. It also revised Form 941, Employer's Quarterly Federal Tax Return, and Forms W-2, Wage and Tax Statement, and W-3, Transmittal of Wage and Tax Statements, to reflect the HIRE Act.