GETTING ACTIVE: ACTIVE VS. PASSIVE INCOME AND THE NIIT

Billy Thomas,  CPA

In our previous post, we outlined the basics for those individuals who are subject to the 3.8% Net Investment Income Tax (NIIT) for 2013. In summary, portfolio and passive income are two categories of income subject to the NIIT. It would then seem intuitive that to avoid this additional surtax of 3.8% on net investment income, you would simply need to have income derived from a business, since income derived from a business is neither passive nor portfolio. […]

November 26, 2013 Accounting, Tax Read more...

2013 NET INVESTMENT INCOME TAX FOR INDIVIDUALS, TRUSTS AND ESTATES

Sean Urbany, CPA

In addition to the various tax increases enacted on January 1st of this year as part of the American Taxpayer Relief Act of 2012 (which averted the so-called fiscal cliff), taxpayers should note one other tax change for 2013: the 3.8% tax on net investment income. While it was actually put in place way back in 2010 as part of the health-care law, it went into effect for this year and will apply to individual returns […]

November 18, 2013 Accounting, Tax, Wealth Management Read more...

Erroneous Form 5500 Late-Filing Penalty Notices

Sue Weaver

The IRS has sent erroneous Form 5500 late-filing penalty notices as a result of an internal service programming error.

Businesses that filed their Form 5558, Application for Extension of Time to File Certain Employee Benefit Plan Returns, and then filed their Form 5500 before the IRS posted the Form 5558 received erroneous penalty notices.

The IRS has proposed changes in order to correct this timing error in its processing. In the meantime, the IRS has issued an alert to its […]

November 18, 2013 Accounting, Benefit Plan Accounting Read more...

CHANGES TO FLEXIBLE SPENDING ACCOUNT USE-IT-OR-LOST-IT RULE

Posting by Billy Thomas

The IRS has released a change to flexible spending accounts (FSAs) under cafeteria plans which addresses the “Use-or-Lose” provision. Essentially, an employer can amend their cafeteria plan to allow participants/employees to rollover up to $500 of unused funds to the following year to reimburse out-of-pocket qualified medical expenses. Treasury estimates that nearly 14 million families participate in these plans, which means that a large base of taxpayers is impacted by the change.

Flexible Spending Accounts and Use-It-Or-Lose-It
Flexible […]

November 12, 2013 Tax Read more...

ACA Update: Transitional Reinsurance Program Fee

Sue Weaver

One of the many provisions of the Affordable Care Act is the Transitional Reinsurance Program (TRP). The program is an attempt to stabilize health insurance premiums in the individual market place. Many insurers are concerned that the influx of new enrollees will have higher than average claim costs. In order to smooth negative experience and maintain reasonable premium rates, this program provides reinsurance to health plans that cover high cost enrollees. The program is in effect for a […]

November 7, 2013 Accounting, Benefit Plan Accounting Read more...

Measuring Investment Performance: Understanding Market Indices

Larry Beebe, CPA

New trustees for multiemployer benefit plans can be overwhelmed by the investment knowledge that must be quickly acquired to function effectively in their new roles.  This series provides in-depth information about plan investments to assist new trustees in their fiduciary duty of managing plan assets.

Understanding market indices is essential for properly evaluating your plan’s investments and investment strategy. There are a number of indices you can reference, and understanding their underlying frameworks will help you select the correct […]

November 4, 2013 Accounting, Audit Read more...

IRS Proposes Regulations Regarding Political Activities for 501(C)4 Organizations

The IRS is seeking to clarify what exactly is meant by “political campaign activity” for 501(c)4 organizations. On November 26, IRS and the Treasury released proposed regulations that would establish a “bright-line rule” to determine political conduct inconsistent with the 501(c)4 tax-exempt status. These proposed regulations are in response to the recent charitable organization scandal with the hope that clearer boundaries will help reduce the need for fact-intensive inquiries.

Under the tax code, 501(c)4 social welfare organizations are to be […]

November 1, 2013 Tax Read more...

Considerations for a Family Business Franchise

Posting by Geoffrey D. Brown, CPA

There are many reasons to start a family business. Sometimes it’s just to provide a forum for family members to work together no matter what the product or service is. In the case of a franchise, there are some compelling arguments for a family to opt for this type of business model.

What is a franchise? A franchise is the agreement or license between two legally independent parties which gives:

A person (franchisee) or group […]

October 30, 2013 Accounting, Family Owned Businesses Read more...

BOND BEEBE PRINCIPALS PRESENT AT IFEBP’S 59TH ANNUAL EMPLOYEE BENEFITS CONFERENCE

Bond Beebe, a certified public accounting and advisory firm with offices in Bethesda, Maryland and Alexandria, Virginia, announced that three of their Principals participated in the International Foundation of Employee Benefit Plans’ (“IFEBP”) 59th Annual Employee Benefits Conference, which took place October 20 – 23, 2013 in Las Vegas, Nevada. David P. Dorsey, Scott M. Price and Lawrence R. Beebe each participated in separate speaking engagements during the program. The IFEBP is a non-profit organization that is dedicated to […]

October 28, 2013 Firm News & Events Read more...

Managing the IRS Audits

ISSUE
The IRS recently made an inexplicable decision to increase audits of small companies while easing up on large firms. Small businesses are perceived as being major offenders in noncompliance with tax laws because many have cash components that are not well documented and have loose employee recordkeeping procedures. So, how do you know what practices the IRS is looking for in auditing a business? How can you operate your business from a tax standpoint to keep the auditors away […]

October 28, 2013 Tax Read more...