Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Jan 22

    Q: What’s new this year?

    A: Over the past several years, we have experienced tax changes and developments at a much faster pace than just a few years ago. We’ll highlight only those developments that we believe will have the greatest impact on our clients.

    Safe Harbor for Expensing of Tangible Property Has been Raised 

    The IRS announced in late November that it will raise the deductible amount for purchases of tangible personal property by taxpayers without “applicable financial statements” (audited financial statements) from $500 to $2,500. The change comes after the IRS received comments recommending that the limit be raised.

    To reduce the compliance burden, taxpayers can, under the new tangible property regulations, elect to currently deduct expenditures for the purchase of tangible property that would otherwise have to be capitalized. For taxpayers without applicable financial statements the election was limited to $500 per item or per invoice. After the regulations were issued, many tax practitioners objected to the low $500 de minimis amount, pointing out that, among other things, a typical computer or smartphone often costs more than $500.

    The new de minimis amount applies to costs for tax years beginning on or after January 1, 2016.

    New Tax-Favored ABLE Accounts For Disabled Individuals

    For tax years beginning after 2014, Recent Tax Legislation authorizes a new tax-advantaged savings account (“ABLE Account”) for certain qualified disabled individuals. The tax rules for ABLE Accounts are generally patterned after the tax rules for the popular Section 529 plans which are currently used to accumulate funds for qualified college expenses. The stated purpose of this new savings account is to “provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits otherwise available to those individuals, whether through private sources, employment, public programs, or otherwise” (e.g., private insurance, Medicaid, SSI). Like a Section 529 college-savings account, contributions to ABLE Accounts are not deductible, but assets in the account grow tax-free.

    Revised Due Dates For Various Tax Returns for Tax Years Beginning After 2015

    For tax years beginning after 2015, Recent Tax Legislation revises the initial due dates and/or the extended due dates for a series of tax returns including: Form 1065 (partnership return); Form 1120 (“C” corporation tax return); and Form 1041 (trust and estate income tax returns).  See September’s Taxing Times for more details.

    Failure to File Certain Information Returns Timely Has Become More Costly

    The monetary penalties for failing to file certain information returns (e.g., the Form 1099 series, Form 1095-B, Form 1095-C) have increased. Effective for returns required to be filed after 2015, the penalty for failing to file a Form 1099 with the payee is increased from $100 to $250 for each Form 1099, and in addition, the failure to file a Form 1099 with the IRS is also increased from $100 to $250. Therefore, under the new law, failure to file a 2015 Form 1099 required to be filed in 2016 with both the payee and the IRS would generally trigger a total penalty of $500 ($250 for failing to file with the payee, plus $250 for failing to file with the IRS).

    Planning Alert! These increased penalties are effective for information returns required to be filed after 2015. So the increased penalties will apply to Forms 1099 reflecting payments made during 2015, that are generally required to be furnished to the payee by February 1, 2016, and to the IRS by February 29, 2016 if filed by paper (by March 31, 2016 if filed electronically). Tax Tip- If your business is required to file Forms 1099 for the 2015 tax year, it is more important than ever that you begin gathering the information that is necessary to complete the forms as soon as possible. The February 1, 2016 deadline for furnishing a Form 1099 to the payee is rapidly approaching.

    A Small Employer That Provides Certain “Self-Insured” Healthcare Arrangements May Have To File New Form 1095-B

    Generally, beginning with the 2015 calendar year, providers of health care coverage that qualifies as “Minimum Essential Coverage” under the Affordable Care Act (ACA) must file new information Form 1095-B with the covered individual and the IRS disclosing certain information about the coverage. This form should be filed by health insurance carriers or sponsors for insured plans, and by government agencies that provide healthcare coverage under a government-sponsored program. However, in certain situations, Form 1095-B may also be required to be filed by a private employer (even if not an ALE) if the employer provides employer-sponsored “self-insured group health plan coverage.”  Although the IRS has yet to provide a precise definition of “self-insured group health plan coverage,” it is clear from the instructions to Form 1095-B that this term includes an employer-sponsored “health reimbursement arrangement” (HRA). The IRS defines an HRA as an arrangement funded solely by an employer that reimburses an employee for qualified medical care expenses up to a maximum dollar amount. The IRS has recently announced that sponsoring employers (regardless of the number of workers it employs) must file a Form 1095-B for each employee covered by an HRA, unless the employer satisfies a specific exception. For example, the IRS says that an employer would not have to file a Form 1095-B for an HRA that is provided only to employees who are covered by an insured group health plan sponsored by the same employer. Planning Alert!  Employers that sponsor “self-insured group health plan coverage,” and that don’t meet an exception, are required to furnish a 2015 Form 1095-B to each employee “covered by” the plan by February 1, 2016, and submit Form 1095-B along with transmittal Form 1094-B  to the IRS by February 29, 2016 (if filing by paper), or by March 31, 2016 (if filing electronically). If the employer fails to furnish this form to its “covered” employees and also fails to file with the IRS, it faces a penalty of up to $500 for each Form 1095-B it failed to file.

    Caution! These rules are extremely technical and can be quite confusing – so please call our firm if you have additional questions concerning these new reporting rules.

  • Jan 8

    There are seven critical areas of marketing every business must have in place to be balanced. These seven spokes must be in place for the “wheel” of your business to run smoother, be less stressful, and less time consuming.

    Successful and wealthy business owners consistently have each of these seven critical marketing areas working at their maximum potential. These seven spokes on the marketing wheel are:

    1. A market that is hungry to consume your message… and able to pay for your product or service.
    2. A marketing message that grabs your prospects and draws them into your ad, sales letter, emails, or other marketing pieces.
    3. A system for increasing the lifetime customer value of each customer, client, or patient.
    4. A system for reaching more affluent customers who don’t make purchasing decisions based on price.
    5. A lead generation machine that works so smoothly you never have to wonder where your next customer is coming from.
    6. Strategies for getting your marketing message in front of your customers offline.
    7. Strategies for siphoning more leads to your business online.

    Take a minute to rate yourself on each spoke of your marketing wheel – with 1 being non-existent and 5 being outstanding. This will help you determine where you are the weakest and need the most improvement. It will also show you if you are balanced. As an example, if you rate yourself a 5 on offline strategies but a 1 on online strategies, it’s tough to have a thriving business.

    Make all of your spokes strong in each of these seven areas, and you will have a thriving business that provides you with the income that allows you the freedom from worry.