HOW SOCIAL SECURITY BENEFITS ARE TAXED

Are you wondering if your social security retirement, survivor, and disability benefits will be subject to federal income tax on your 2016 return? Generally, when these benefits are taxed is determined by your "provisional income."

CLEAN YOUR FINANCIAL HOUSE FOR THE NEW YEAR

Out with the old, in with the new. No matter whether you apply the expression to changes in attitude or to life adjustments, the end of the year is a great time to assess your household finances and prepare for new opportunities. Here are suggestions.

DON'T INCLUDE THE IRS ON YOUR GIFT LIST

Suppose a relative gives you an expensive painting. Several years later, your relative dies and you decide to sell the painting. Your accountant says you'll owe capital gain tax on the sale, and asks for your basis in order to reduce the amount on which you'll pay tax. What's your answer?

HAVING PROBLEMS KEEPING EMPLOYEES?

Is retention of good employees a priority for your business? Consider conducting "stay" interviews. These meetings between managers and valued employees can provide insight into why your employees like their jobs, which in turn lets you know how to retain the employees. Conducted on a regular basis, generally more than once a year, stay interviews tell employees you're serious about accepting feedback and keeping them on the job.

COMPLETE THESE RETIREMENT PLAN STEPS BEFORE YEAR-END

December 31 is the last day you can benefit from certain retirement tax breaks. For example, if you haven't put the maximum amount allowed in your 401(k) – $18,000 in 2016 – increasing your contributions can save you money. If you're over age 50, you can make a catch-up contribution to a 401(k) of an additional $6,000. If you're age 70½ or older, remember to take required minimum distributions from retirement plans to avoid a penalty. For more tips on managing your retirement plans, contact us at (518) 798-3330.

YOUR SUDDENLY DEAD MOBILE PHONE MAY BE A SIGN OF FRAUD

According to the Federal Trade Commission, in a growing type of fraud known as a "SIM swap" scam, fraudsters take over your mobile account in order to steal your identity. The SIM, or subscriber identity module, card in your phone is the memory chip that stores information identifying the phone to a network. Thieves contact your phone company, claiming to be you, and request activation of a new SIM card with your existing phone number. Your phone goes dead, and the thief can then intercept phone calls and text messages that allow access to financial accounts. As a safeguard, consider adding a password that must be activated before your phone account can be changed.

S CORPORATION LOSS FOR 2016? CHECK YOUR BASIS

Typically, stock basis in an S corporation begins with the capital contribution you make to get the company started. At the end of each taxable year, your stock basis is adjusted to reflect your business's operating results. After your stock basis reaches zero, you may be able to deduct additional losses, up to the extent of your debt basis. However, once your stock and debt basis are both reduced to zero, losses incurred are suspended, and you get no current tax benefit. Contact us at (518) 798-3330 if you're in this situation. We can provide a solution and guide you through the rules.

KEEP AN EYE ON YOUR COMPANY'S CASH

Do you regularly monitor your company's cash accounts? Being aware of where your cash is going can help prevent theft or improper expenditures, which are among the chief sources of loss for small companies.

WHO'S ON YOUR TEAM?

Tough financial decisions can affect both current and future tax bills, and lining up a team of professional advisors who are ready and willing to help makes a difference. For the most benefit, make sure your advisors know each other and work well together.

FIGHT SCAMMERS THE OLD-SCHOOL WAY

Scam artists are relentless in finding ways to take your money. But some old-school methods are still effective for protecting yourself. Here are suggestions.

PLANNING A WEDDING OVER THE HOLIDAYS? PLAN FOR TAXES TOO

Will wedding bells be ringing for you along with holiday sleigh bells this year? If so, add tax planning to your to-do list. Here are tax tips for soon-to-be newlyweds.

ASSET RECOVERY CAN BE A DO-IT-YOURSELF TASK

The Securities and Exchange Commission and the Financial Industry Regulatory Authority warn investors who may have lost money on a speculative security to be on the alert for "follow-on" frauds. These include being contacted by an official-sounding company promising to help you recover your lost investment, and requesting an up-front fee to do so. Be aware that in most cases, you can attempt to recover your lost investment on your own, at little to no cost.

 

WANT A HAPPIER RELATIONSHIP? DISCUSS YOUR FINANCES

According to a survey by a U.S. national bank, 78% of couples who talk at least once a week about finances are happy or extremely happy with their partners. If making time for the "money talk" could improve your relationship, why not establish a habit of discussing finances and setting financial goals? Contact us at (518) 798-3330 for suggestions about how to get started.

ARE YOU WORKING OVERTIME PREPARING FOR THE NEW LABOR RULES?

The U.S. Department of Labor updated the rules for paying overtime, and the changes take effect December 1, 2016. Under the new rules, salaried employees who earn less than $913 per week ($47,476 per year) will be eligible for overtime pay. That's double the annual exempt amount of $23,660 under current rules. Begin reviewing your payroll policies now to avoid penalties and fines for noncompliance. One important step is to start tracking hours for your salaried employees.

DON'T GET STUCK WITH AN UNDERPAYMENT PENALTY

Don't let penalties for underpaid taxes increase your tax bill next April. Check the total you've paid in for 2016 through withholding and/or estimated taxes. If you've underpaid, consider adjusting your withholding for the final months of the year or increasing your remaining quarterly estimate. If you employ household workers, be sure your calculations include the payroll taxes you'll owe for them. Remember to include the 3.8% tax on net investment income in your planning, too.

BEWARE OF THIS FAKE TAX BILL SCAM

The IRS has again issued a scam warning. The newest scam involves receiving via email a fake version of an IRS bill related to the Affordable Care Act. The bill requests payment by check or by clicking a link in the email. Remember, genuine IRS notices do not come to your email, and do not request online payment. Email safety tip: Always verify the sender before opening attachments or clicking on links. Whenever you receive communication from the IRS, contact us at (518) 798-3330. We'll help you sort out what you need to do.

A PRIMER OF EDUCATION TAX BREAKS

Are your children in college? You may be able to offset some of the costs of their education with tax breaks.

YOUR BUSINESS, YOUR SALARY

As the owner of your business, you are the decider of salaries for your staff. That's true for your own salary too.

BEWARE OF BOGUS CHARITIES

Times of crisis, when others are suffering and you want to help most, is also when heartless fraudsters tend to strike. If you're planning a donation, watch for these signs that a charity isn't on the up-and-up.

NEW RELIEF FOR 60-DAY ROLLOVER ERRORS

One of the pitfalls of receiving a distribution from your IRA with the intention of "rolling it over," or depositing it into another IRA or retirement plan, is the 60-day rule. Under the rule, you're required to complete the rollover within 60 days of receiving the distribution. If you miss the deadline, you have to include the distribution in your income and perhaps pay a penalty. In the past, you generally had to request a special statement from the IRS to avoid that outcome. Now the IRS says you may qualify for a waiver if you meet one of eleven allowable reasons. Contact us at (518) 798-3330 for details.

COLLEGE STUDENTS: BE AWARE OF PHONE SCAMS

As you settle into your fall semester routine, both the FBI and the IRS want you to be alert for calls from scammers. The calls may spoof a legitimate number on your caller ID, and appear to come from an actual government agency, including the FBI or IRS. The caller will demand immediate payment of delinquent taxes, such as the non-existent "Federal Student Tax," or student loans, dues, or parking tickets. If you receive one of these calls, disconnect. Legitimate government agencies will not ask you for immediate payment, nor request credit or debit card information over the telephone.

WATCH OUT FOR THESE EARLY WARNING SIGNS FROM CREDIT CUSTOMERS

Once you have extended credit to a customer, you have a stake in continuing the relationship even if you suspect trouble is brewing­.

DESIGNATE BENEFICIARIES TO AVOID UNINTENDED CONSEQUENCES

After your death, the disposition of retirement accounts, life insurance policies, annuities, and accounts at financial institutions are governed by beneficiary designations. If those designations are outdated, unspecific, or wrong, your assets may not be distributed the way you would like.

RETURNING HOME AS AN ADULT

Are you thinking of returning to your childhood home to live with your parents? Although heading home after graduation or a divorce may feel like a setback, a temporary return to living with your parents can present opportunities to improve your financial situation.

WHAT'S THE DIFFERENCE BETWEEN A CREDIT CARD AND A DEBIT CARD?

When you pay for clothes in a store or dinner at a restaurant, you might use either a credit card or a debit card. In your mind, they may be the same. But there are differences to be aware of.

WORK-RELATED EDUCATION COSTS MAY BE DEDUCTIBLE

Are you going to school this fall to earn an advanced degree or to brush up on your work skills? If so, you might be able to deduct what you pay for tuition, books, and other supplies.

MAKE BETTER BUSINESS DECISIONS WITH SIMPLIFIED DATA

As a manager, you're no doubt swimming in a constant stream of information. Fortunately, you can keep your head above water by boiling down the data into a format that's relevant, concise, and user-friendly. For instance, significant indicators can typically be gathered on a single sheet of paper. Examples include revenues by product or service line, cash and accounts receivable balances, gross profit ratios by product line for retail and wholesale businesses, and productive salaries and benefits for service businesses. If you'd like help developing a simplified system tailored to your specific needs, contact our office at (518) 798-3330.

PREPARE FOR NEW WELLNESS PLAN NOTIFICATIONS

Wellness programs, when provided as a fringe benefit as part of a cafeteria plan, can benefit both your company and your employees. But you may be collecting information about your employees that is regulated by several federal statutes, including rules on confidentiality and nondiscrimination. Beginning in January 2017, you'll need to provide your employees with a notice stating what information you collect, and how it will be used, along with other details.

REVIEW HEALTH INSURANCE MARKETPLACE NOTICES PROMPTLY

Health insurance marketplaces are sending notices to employers this year when employees receive advance premium tax credits to help pay health insurance premiums. The notice itself does not assess a penalty, but if you get a notice, you'll want to make sure the information is correct. You have 90 days to appeal if you believe you provide employees with qualified coverage. Contact us at (518) 798-3330 for assistance.

GET SERIOUS ABOUT CATCHING UP

If you're age 50 or older, tax law has a permanent provision that lets you make extra contributions to your retirement plans. These "catch-up" contributions vary depending on the type of retirement plan. For example, if you participate in a SIMPLE, you can make a catch-up contribution of up to $3,000 in 2016, over and above the maximum $12,500 salary reduction contribution. For IRAs, both Roth and traditional, the 2016 catch-up contribution is $1,000.

SAVING FOR A COMFORTABLE RETIREMENT IS UP TO YOU

If your employer offers a 401(k) plan, participating can mean the difference between having a sufficient nest egg and worrying about your expenses after you stop working. Tips for making the most of your 401(k) include contributing at least enough to receive the amount your company will match, and allocating your contributions between different types of investments in a way that meets your tolerance for risk while still allowing for the growth rate you need. The retirement clock is ticking. Contact us at (518) 798-3330 for more suggestions about ways you can save.

WHO PAYS FOR SOCIAL SECURITY AND MEDICARE?

According to the 2016 Summary of Annual Reports by the trustees, the major source of funding for the Social Security and Medicare programs is the payroll tax you and your employer pay, or that you pay as a self-employed worker. In addition, about 13% of the funding comes from the taxation of social security benefits – those taxes you pay with your federal income tax return when you collect social security benefits and your income is above a certain amount. Other sources of funding come from the interest earned from the Treasury on the program assets, monthly premiums paid for Medicare benefits, and general tax revenue.

ACCOUNTABLE PLANS ARE A WIN-WIN BUSINESS IDEA

Are you looking for a way to give your employees a tax-free benefit that is also tax-deductible for your business?

TAKE THESE STEPS TO HELP PREVENT FRAUD IN YOUR BUSINESS

How can you prevent employee fraud in your business? Here are four suggestions.

GOOD DEBT, BAD DEBT: WHAT'S THE DIFFERENCE?

Here are two questions to ask before incurring debt. What are the benefits of taking on this debt? And does the cost exceed the benefit?

FOR BUSINESS PROFITABILITY, UNDERSTAND THE LAW OF THE VITAL FEW

How well do you know your customers? Which ones are the most profitable? Which ones take most of your time? Finding the answers to these questions can be worthwhile.

ACCESS TAX DETAILS ONLINE

Transcripts of your federal income tax return, tax account, wages and income, and record of account, as well as a verification of non-filing, are once again available for no charge online at the IRS website. Sign up to view, print, or download your transcript, or request that a transcript be mailed to you. Remember, transcripts only provide line-by-line information. If you need a copy of your original return, use Form 4506, Request for Copy of Tax Return, instead. Contact us at (518) 798-3330 if you have questions.

YOU CAN STILL BENEFIT FROM THE WORK OPPORTUNITY TAX CREDIT

The Work Opportunity Tax Credit (WOTC) is a federal income tax break that can reduce your business income tax when you hire workers from specified groups that typically experience high unemployment rates. Normally, you have 28 days after the worker's first day to complete the necessary paperwork for the credit. But, for certain workers hired between January 1, 2015, and August 31, 2016, the 28-day rule has been extended until September 28, 2016. The extended date gives you an opportunity to review last year's personnel files for credit-eligible employees. Contact us at (518) 798-3330 to learn how the WOTC can help save tax dollars.

GET AUTOMATED HELP TO UNDERSTAND AFFORDABLE CARE ACT PENALTIES

The Taxpayer Advocate Service website has an automated tool to help you understand how the employer penalties put in place by the Affordable Care Act (ACA) apply to your business. The "estimator" will help you determine how many full-time employees you have, whether you're an applicable large employer, and what responsibilities your business has under ACA rules. Contact us at (518) 798-3330 for answers specific to your business.

ARE YOU TAKING STEPS TO PREVENT FRAUD IN YOUR BUSINESS?

The 2016 Global Fraud Study released recently by the Association of Certified Fraud Examiners shows that asset misappropriation occurred in more than 83% of the cases reported. Asset misappropriation includes billing and check tampering schemes. According to the study, billing schemes were most common, comprising slightly more than 22% of the cases, and check tampering schemes were the costliest, with a median loss of $158,000. Not surprisingly, businesses with poor internal controls, or no internal controls, were the most susceptible. Contact us at (518) 798-3330 for tips and suggestions for keeping your business assets safe.

FORM 5500 DUE DATE IS APPROACHING

August 1, 2016, is the deadline for filing Form 5500 for retirement or employee benefit plans on a calendar year. (The usual due date of July 31, 2016, is a Sunday.) There are two updates to be aware of. First, Form 5500 includes new compliance questions that plan sponsors can skip when completing the form. Second, if you're required to file at least 250 returns of any type with the IRS, including information returns (for example, Form W-2 and Form 1099), you may need to electronically file Form 5500-EZ for calendar year 2015.

START PREPARING NOW FOR NEW OVERTIME RULES

In May, the U.S. Department of Labor updated the rules for paying overtime. Under the new rules, salaried employees who earn less than $913 per week ($47,476 per year) will be eligible for overtime pay. That's double the annual exempt amount of $23,660 under current rules. The changes take effect December 1, 2016, which means you need to begin reviewing your payroll now, as penalties and fines can be assessed for noncompliance. One important step is to begin tracking hours for your salaried employees.

IS YOUR CHILD READY FOR A SUMMER JOB?

If your child is planning to work this summer, make sure you know the tax basics.

IMPROVE PRODUCTIVITY WITH HAPPY EMPLOYEES

Happy employees can have a positive impact on your operations, customer support, and profit level. Here are suggestions for keeping your workforce upbeat.

WHAT YOU NEED TO KNOW ABOUT HIRING SEASONAL WORKERS

If summertime is a busy time for your business, you may be ready to hire seasonal workers. Here are tax rules to keep in mind.
 

WHEN DISASTER STRIKES, WILL YOUR BUSINESS BE PREPARED?

Disaster preparedness involves answering the question: How would a disaster affect your business? If you're not sure, it's time to start planning.

HSA CONTRIBUTION LIMITS BARELY BUDGE FOR 2017

The IRS recently announced the inflation-adjusted contribution limits for health savings accounts (HSAs) for 2017. HSAs combine high-deductible health insurance plans with a medical savings account. You make tax-deductible deposits into the savings account, and later withdraw the funds to pay unreimbursed medical expenses. The 2017 contribution limit for individuals is $3,400, up $50 from 2016. The limit for family coverage is $6,750, unchanged from 2016. If you're age 55 or older, you can also make a catch-up contribution of an additional $1,000.

WILL HIRING SEASONAL WORKERS MAKE YOU SUBJECT TO AFFORDABLE CARE ACT PENALTIES?

Generally, having 50 or more employees means you need to provide health insurance or pay a penalty. But what happens when you hire workers who perform labor or services on a seasonal basis – for instance, just for the summer? In this case, the law provides an exception, based on the number of employees you have, and how many are seasonal workers. Contact us at (518) 798-3330 for more information.

REPORT YOUR FOREIGN ACCOUNTS BY JUNE 30

If you hold foreign bank or financial accounts, or have signature authority over such accounts, and the total value of all your accounts exceeds $10,000 at any time during the calendar year, you may be required to file a Treasury Department report known as the FBAR. It's easy to overlook this requirement because it's separate from your federal income tax filing, with a different deadline and strict rules.

"FBAR" refers to Form 114, Report of Foreign Bank and Financial Accounts. Your 2015 Form 114 must be filed electronically with the Treasury Department no later than June 30, 2016. No filing extension is available. Contact us at (518) 798-3330 if you need details or assistance.

FINANCIAL TIPS TO FOLLOW WHEN A SPOUSE DIES

The death of a spouse is emotionally and financially devastating. Making decisions of any kind is difficult when you're vulnerable and grieving, but having a plan to follow may help. Here are suggestions for dealing with financial tasks.

IS THIS INSURANCE MISSING FROM YOUR FINANCIAL PLAN?

What springs to mind when you hear "insurance?" Most likely, you think about auto, health, home, and life. But what if an illness or accident were to deprive you of your income? Even a temporary setback could create havoc with your finances.

DON'T LOSE PART OF YOUR IRA INHERITANCE TO PENALTIES

If you inherit an Individual Retirement Account from someone other than your spouse, you may be surprised to learn you have to take distributions. That's generally the case whether the IRA is a traditional or a Roth account. If you fail to take the distributions as required, you may owe a penalty of as much as 50% of the amount you should have taken. Distributions from inherited IRAs have specific deadlines. Contact us at (518) 798-3330 for help managing these key dates.

COUNT EMPLOYEES TO AVOID ACA PENALTIES

The IRS recently updated a web page explaining how to figure out if you're an "applicable large employer," or ALE. If you are, you may have to pay a penalty for not providing health insurance to your employees. For 2016, your business will generally meet the definition of an ALE if you employed an average of at least 50 full-time employees (including full-time equivalent employees) during 2015. A full-time employee for any calendar month is one who averages at least 30 hours of service per week or at least 130 hours of service during the month.

 

LUXURY AUTO DEPRECIATION LIMITS ANNOUNCED FOR 2016

The IRS recently issued the depreciation limits for business vehicles you buy and place into service this year. For cars, if 50% bonus depreciation does not apply, the first year limit is $3,160. If bonus depreciation applies to a business car, the first year limit is $11,160. For light trucks and vans first placed into service in 2016, the limit is $3,560 if bonus depreciation does not apply and $11,560 if bonus depreciation does apply. Heavy SUVs (vehicles built on a truck chassis and rated at more than 6,000 pounds gross weight) are exempt from "luxury auto" depreciation limits.

BE SCAM-SMART!

If the IRS has questions, you'll get a notice in the mail, not via telephone, email, or social media.

DID YOU INHERIT AN INDIVIDUAL RETIREMENT ACCOUNT?

Distribution rules are different for beneficiaries than for account owners.  Contact us at (518) 798-3330 for more information.

PENALTIES FOR NOT MAINTAINING REQUIRED HEALTH COVERAGE

As of March 3, 2016, more than 2.7 million taxpayers paid $1 billion in penalties for not maintaining required health coverage in 2015.

LACK OF DIVERSIFICATION MAKES FOR RISKY BUSINESS

Is your business adequately diversified? Relying on too few customers, vendors, or key employees can leave you open to risks that can be catastrophic. Here's what to consider.

SMART REVIEW TACTICS LEAD TO LONG-TERM BUSINESS SUCCESS

As a business owner, monitoring operations and dealing with everyday problems no doubt takes up the bulk of your day. But carving out time for a comprehensive review can benefit your business. Here are key areas to consider.

USE TAXES TO REDUCE YOUR TAX

Are you planning to itemize on your 2015 federal income tax return? If so, you can claim a deduction for taxes paid. According to IRS statistics, taxes are the most frequently claimed itemized deduction, as well as the largest. But what kind of taxes can you deduct on your personal return?

BE AWARE OF THESE FOUR IRA RULES

If you have an individual retirement account, you're aware of how complicated the rules can get. Here are four to remember as you prepare your 2015 federal income tax return.

GET CREDIT FOR RETIREMENT CONTRIBUTIONS

Did you make contributions to a traditional or Roth IRA, a myRA, or a SEP or SIMPLE plan in 2015? You may qualify for the Retirement Savings Contributions Credit, more popularly known as the "saver's" credit. If you're eligible, you can apply this federal income tax credit against the tax you owe on your 2015 return. The credit is available even if you take a tax deduction for a traditional IRA contribution, as well as for IRA contributions for last year that you make before the April due date of your return.

HIRING WORKERS CAN BRING TAX BREAKS

The Work Opportunity Tax Credit, known as WOTC, can reduce your federal income tax liability dollar-for-dollar when you hire certain workers. The credit is available for 2015 if you hired workers from "targeted" groups, such as ex-felons, food stamp recipients, and Supplemental Security Income recipients. Beginning in 2016, you can also claim the credit when you hire individuals who were unemployed for at least 27 consecutive weeks and who received unemployment compensation.

NEW TAX BENEFITS AVAILABLE WHEN CLAIMING THE RESEARCH AND DEVELOPMENT CREDIT

If you conduct qualified research activities, you may be eligible to claim a federal income tax credit known as the "research and development" credit. This credit is now permanent and may benefit you when you design, develop, and improve business products or processes. Beginning in 2016, the research and development credit can be applied against your alternative minimum tax liability. In some cases, the credit may also be applied against up to $250,000 of payroll taxes.

WHICH DEPRECIATION METHOD IS BEST FOR YOUR BUSINESS?

When you purchase assets and use them in your business, you have several options for deducting the cost. For example, you may choose to write off the full cost using Section 179, an alternative that lets you expense up to $500,000 of new and used equipment purchases. You can also use "bonus" depreciation to write off up to 50% of the cost of new assets with a life of 20 years or less. In both cases, you apply regular depreciation methods to the remaining value of the assets. The best way may not be a single choice, but rather a combination that optimizes your tax benefit. Contact us at (518) 798-3330 for a depreciation review.

ONE MORE EXTENSION FOR ESTATE EXECUTORS

A law passed last summer added a new task for estate executors and others who file estate tax returns after July 31, 2015: providing a statement of the value of estate assets to beneficiaries and the IRS. The statement is designed to ensure consistency between the value of the property for estate tax purposes and the basis a beneficiary reports for income taxes. The information is filed on Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent. If you're required to complete Form 8971 before March 31, 2016, you do not need to do so until March 31, 2016. (The original due date was February 29, 2016.)

DO YOU HAVE ENOUGH EMERGENCY SAVINGS?

A December 2015 survey by a consumer financial services company showed that 36% of the people who participated said they dealt with their most recent unexpected expense by using savings. Would you be part of that group? Here are tips for starting your "rainy day" fund.

Define how much emergency savings is enough. A good starting point is to plan for your emergency fund to cover three to six months of expenses. Another good starting point: Ask yourself how much you'll need to cover minimum monthly expenses without resorting to credit cards or lines of credit. Your assessment of an adequate balance will vary based on your financial situation, including the vulnerability of your income. For example, a one-earner household is more vulnerable than a two-earner household when it comes to paychecks, so the one-earner family generally will need to set aside more for emergencies.

Track how much you already have set aside. Include all sources in your accounting. For instance, some companies provide payment for accrued vacation and/or sick leave to laid-off employees. If your company provides this benefit and you maintain significant balances, you may not need as much in an emergency fund to help you weather an unexpected layoff.

Decide whether to pay off bills first. Putting excess cash toward high interest credit card balances might make more sense than funding a savings account that earns a much lower rate of interest.

Keep your funds liquid. Emergency money should be easy to get at. You don't want to have to sell investments at a potential loss or pay withdrawal penalties in order to cover an unexpected hit to your finances. Look into savings or money market accounts as places to accumulate cash.

We can help you estimate how much to stash away in your emergency fund. Give us a call at (518) 798-3330 for help establishing a savings goal for those stormy days.

DEPRECIATION BREAKS BOOST TAX DEDUCTIONS

Did you buy equipment or other business assets during 2015? Here are the current rules for maximizing your tax deduction.

WHAT'S THE PENALTY FOR NOT HAVING HEALTH INSURANCE?

Did you have health insurance in 2015? If not, you may owe a penalty on your federal income tax return. For 2015 returns, the penalty is the higher of a flat dollar amount or a percentage of your household income. The flat dollar amount is $325 per adult and $162.50 per child under age 18, up to a maximum of $975 per family. The percentage-of-income amount is 2% of household income above the filing threshold for your filing status. The maximum penalty for this calculation is based on the total annual average premium for a bronze level insurance plan purchased from the government website.

WILL THIS IRS DUE DATE EXTENSION HOLD UP YOUR TAX RETURN?

In December, the IRS extended the time to file for employers who were required to provide health care information forms such as Form 1095-C to employees. Because the new due date is March 31, you may be ready to file your federal income tax return before you receive Form 1095-C. The IRS says that for 2015, you do not need to wait to receive the form. Instead, you can rely on other information to complete and file your return. Contact us at (518) 798-3330 if you have questions about tax forms you may be receiving regarding your health insurance coverage.

FORM 1099 PENALTIES INCREASE SHARPLY

Have you filed required Forms 1099 for 2015? The forms were due by February 1 to individuals you paid $600 or more in the course of your business during the year. If you haven't completed Forms 1099, you'll want to do so as soon as possible. The penalties for failing to file range from $50 to $250 per form, depending on how late your filing is and whether or not the failure to file was intentional. Total penalties can go as high as $1 million for businesses with gross receipts under $5 million or $3 million for those with gross receipts over $5 million. Contact us at (518) 798-3330 for help in determining whether you need to file.

STAY COMPLIANT WITH MINIMUM WAGE LAWS

With some exceptions, the federal minimum wage is $7.25 per hour. But your state may require you to pay a different rate, and that rate may have changed as of January 1. When employees are subject to both state and federal minimum wage laws, the law says you need to pay the higher of the two. Remember that overtime rates are also affected by the minimum wage. Review your payroll practices, including the posting of required notices to employees.

THREE POSITIVE STEPS TO FINANCIAL WELL-BEING

While you're gathering information to prepare your 2015 tax return, set aside time for a financial review. Here are steps to get started.

CORPORATE MINUTES SUPPORT TAX DEDUCTIONS

Well-documented corporate minutes can provide valuable supporting evidence if the IRS questions choices you make on your tax returns. Minutes are especially important when related-party transactions are involved, such as payments, loans, or distributions between the company and you or other owners. For example, the IRS may challenge the amount of your compensation. Corporate minutes that document the factors considered by the board in approving the compensation can be a defense against this type of challenge.

TAX BREAKS EXTENDED RETROACTIVELY; SOME ARE PERMANENT

In mid-December, Congress renewed a long list of tax breaks known as "extenders" that have been expiring on an annual basis. This year many of the rules are retroactive to the beginning of 2015. You may be able to benefit from some of them as you prepare your 2015 federal income tax return.

IDENTITY THEFT: THE IRS OFFERS TIPS TO PROTECT YOUR DATA

The IRS has launched a new campaign to encourage you to protect your tax and financial data, both digital and paper. As part of the campaign, the IRS plans to release videos and consumer friendly tax tips, and sponsor local events across the country. You can get started by reading the new Publication 4524, Security Awareness for Taxpayers, on the IRS web site (https://www.irs.gov/pub/irs-pdf/p4524.pdf). Other suggestions are on the Security Awareness Tax Tips page (https://www.irs.gov/uac/IRS-Security-Awareness-Tax-Tips). The campaign will continue through April.

ARE YOU SAVING FOR RETIREMENT?

While retirement plan contribution limits have not increased for 2016, taking full advantage of allowable contributions and any amounts your employer matches is still a good idea. Contributions you make to employer-sponsored retirement plans reduce your taxable income because your employer deducts the amount you specify from your paycheck before taxes.

For 2016, you can contribute $18,000 to your 401(k), plus another $6,000 if you're celebrating your 50th or older birthday during 2016. You can save up to $12,500 in your SIMPLE account this year, plus another $3,000 if you're age 50 or over.

ADJUST YOUR MILEAGE REIMBURSEMENTS FOR 2016

Standard mileage rates for deductible vehicle expenses have decreased from the 2015 rates. Here are the rates to use to calculate 2016 reimbursements and deductions.

Business. Starting January 1, the rate is 54 cents per mile for the use of a vehicle for business purposes. That's down from 57.5 cents in 2015.

Medical and moving. The rate for medical and moving mileage decreases from last year's 23 cents a mile to 19 cents a mile.

Charitable. The standard per-mile rate for charitable service remains at 14 cents.

GIVE A GIFT THAT WILL LAST A LIFETIME

Financial gifts can bestow benefits for many years to come. Here are options to consider.