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Don't Forget About PCORI Fees due July 31, 2015

irs bdgAs part of the Affordable Care Act, the IRS was charged with collecting a fee from health insurers and plan sponsors of self-insured plans each year, for seven years, to help fund the Patient-Centered Outcomes Research Institute (PCORI). These so-called “PCORI Fees” are a set fee based on the average number of lives covered by the plan during the year. The fee started at $1 but increases with inflation, and is currently at $2.08 per average number of lives covered for years ended after September 30, 2014 and before October 1, 2015. The fees should stop being collected beyond years ending after October 1, 2019.


Under most plans, the health insurer is responsible for paying the fee and filing. However, if you have a self-insured plan, the plan sponsor is responsible. That is usually the employer in a self-insured plan.


Under a self-insured plan, the employer must file Form 720 (Quarterly Federal Excise Tax Return) and pay the fee using the Electronic Federal Tax Payment System (EFTPS). The form and fee are due July 31, 2015. The form itself is very simple but there is some nuance in calculating the average number of covered lives. More details on that calculation can be found in IRB 2012-52

The IRS has a detailed Q&A here


If you need help filing the form, or have any questions, please feel free to contact Bond Beebe.

IRS Announces Cost-of-Living Adjustments

Earlier this week, both the Internal Revenue Service and the Social Security Administration announced cost-of-living adjustments impacting the 2015 tax year.

First, the IRS the announced a number of cost-of-living adjustments related to retirement items. Below are some of the main points announced by the IRS:

  • Taxpayers who participate in 401(k) plans, 403(b) plans, 457 plans, or the Federal government’s Thrift Savings Plan, may now choose to make annual elective deferrals of up to $18,000 in 2015. The annual catch-up contribution limit for taxpayers aged 50 years or over has also increased to $6,000.
  • The 2015 limit for annual contributions to Individual Retirement Arrangement (IRA) remains unchanged at $5,500. The annual catch-up contribution for taxpayers aged 50 years or over also remains the same at $1,000.
  • For defined contribution plans, the maximum contribution for 2015 has increased to $53,000 while the annual compensation limit has increased to $265,000.

Hiring your Children in your Business – It’s Not So Taxing

hiring-your-kidsIf you own a business, employing your child can be a great opportunity to teach valuable lessons about earning, saving and hard work. It is also an excellent tax-savings strategy for you and your child. However, before you bring your college kid on your payroll for the summer, there are a number of regulations and savings strategies to keep in mind.

Retirement Planning: Roth vs. Traditional 401(k) Plans

roth-vs-traditional-401kThis post was written with the assistance of Ashleigh Zeller from the Firm's Benefit Plan sector.  

With many employers now offering a Roth 401(k) component with their retirement benefits, you may be wondering which option works best for your retirement planning purposes. Like most questions involving tax planning matters, the answer is rarely straightforward.

In this post, we’ll look at the differences between Roth and traditional 401(k) plans, as well as Roth IRA and Roth 401(k) plans, and cover some of the tax consequences you may incur when using these retirement savings strategies.

Protecting Yourself from Tax-Related Identity Theft

tax-related-identity-theftLast week the IRS released its annual “Dirty Dozen” Tax Scams for 2014 as a reminder to be on the lookout for fraud and take steps to protect sensitive information as you file your taxes. Not surprisingly, identity theft tops this list. 

Tax-related identity theft continues to grow – last year 1.6 million Americans were victims within the first half of the year. It is essential to be on the lookout for scams and take the necessary precautions with your social security number and other personal information.

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