The Health Care Reform Act has a provision that requires 1099s for goods, not just services, starting in 2012.
Beginning in 2012, self-employed individuals, small businesses and charities will be required to provide 1099 forms to every vendor from which they buy more than $600 in goods, under a provision in the new health care reform law. The Internal Revenue Service is considering exempting some small-business purchases made with credit or debit cards, as the IRS will already receive a record of those transactions from financial institutions, starting in 2011. "We're looking at ways to try to minimize the burden on businesses as much as possible," said IRS spokesman Terry Lemons. USA TODAY
Wednesday, July 14, 2010
WASHINGTON IS NOW WONDERING IF THE IRS CAN ACTUALLY HANDLE HEALTH CARE
An important part of the the health care bill was that it relied on the IRS to do enforcement and monitoring of the program. If you have been following my emails I was leery of the ability of the IRS to take on this new challenge. The IRS has enough on its plate already without this additional burden. Now in an article in The Hill it appears that Washington is starting to realize the problem.
http://thehill.com/blogs/healthwatch/health-reform-implementation/108015-tax-report-rehashes-debate-over-cost-effectiveness-of-health-reform-law%3C/span%3E
http://thehill.com/blogs/healthwatch/health-reform-implementation/108015-tax-report-rehashes-debate-over-cost-effectiveness-of-health-reform-law%3C/span%3E
Tuesday, July 13, 2010
NATIONAL DEBT WENT UP BY $166B IN ONE DAY LAST WEEK
Did you see this? According to the following article in the Washington Times our debt increased in one day more than the entire 2007 debt.
(Washington Times) -- WashingtonTimes.com reports that the nation's debt leapt $166 billion in a single day last week, the third-largest increase in U.S. history, and it comes at a time when Congress is balking over higher spending and debt has become a key policy battleground. "The one-day increase for June 30 totaled $165,931,038,264.30 -- bigger than the entire annual deficit for fiscal year 2007 and larger than the $140 billion in savings the new health care bill will produce over its first 10 years." Adds the Times, "The figure works out to nearly $1,500 for every US household, or more than 10 times the median daily household income."
(Washington Times) -- WashingtonTimes.com reports that the nation's debt leapt $166 billion in a single day last week, the third-largest increase in U.S. history, and it comes at a time when Congress is balking over higher spending and debt has become a key policy battleground. "The one-day increase for June 30 totaled $165,931,038,264.30 -- bigger than the entire annual deficit for fiscal year 2007 and larger than the $140 billion in savings the new health care bill will produce over its first 10 years." Adds the Times, "The figure works out to nearly $1,500 for every US household, or more than 10 times the median daily household income."
Monday, July 12, 2010
QUOTE OF THE WEEK
"America's future will be determined by the home and the school. The child becomes largely what he is taught; hence we must watch what we teach, and how we live."
--Jane Addams
--Jane Addams
HELP BAIL ME OUT!
I'm excited to tell you that I have chosen to serve as an MDA Jailbird and am being Locked-Up...that's right, I'm going behind bars to help Jerry's Kids©. In order to be released on good behavior, I need your help to raise my “bail.”
My bail has been set at $1,600.00 and if everyone I know makes a tax-deductible donation, I’ll reach my goal quickly!
Just click here to make a secure, online donation before 08/17/10. This is a fun event benefiting individuals and families served by MDA who are affected by neuromuscular disease. I am honored to partner with MDA, and help this important cause.
Don't hesitate to call or e-mail me with any questions.
Thanks in advance for your help. Together we'll make a difference!
Larry
P.S. I'm counting on you, click here to donate.
My bail has been set at $1,600.00 and if everyone I know makes a tax-deductible donation, I’ll reach my goal quickly!
Just click here to make a secure, online donation before 08/17/10. This is a fun event benefiting individuals and families served by MDA who are affected by neuromuscular disease. I am honored to partner with MDA, and help this important cause.
Don't hesitate to call or e-mail me with any questions.
Thanks in advance for your help. Together we'll make a difference!
Larry
P.S. I'm counting on you, click here to donate.
Friday, July 9, 2010
LARGEST TAX HIKES IN HISTORY
Only six months to go until we see some of the largest tax hikes in history. See the following article: http://www.atr.org/sixmonths.html?content=5171
Thursday, July 8, 2010
HIGHLIGHTS OF IMPORTANT TAX DEVELOPMENTS IN THE LAST THREE MONTHS
The following is a summary of the most important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. We have covered most of these in prior emails but this is a good summary.
Email if you would like more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.
Deadline extended for closing home purchase to qualify for homebuyer credit.
Relief has been provided to taxpayers who couldn't meet a key June 30, 2010, closing date for qualifying for the homebuyer credit. In general, both the regular first-time homebuyer credit of $8,000 and the reduced credit of $6,500 for long-term residents expired for homes purchased after Apr. 30, 2010. However, if a written binding contract to purchase a principal residence was entered into before May 1, 2010, the credit could be claimed if the purchase closed before July 1, 2010. Under the relief measure, if a written binding contract to purchase a principal residence was entered into before May 1, 2010, the credit may be claimed if the purchase is closed before Oct. 1, 2010. Thus, this extension allows homebuyers who signed a contract no later than the April 30th deadline to complete their closing by the end of September.
Guidance addresses tax breaks for hiring new employees.
Employers are exempted from paying the employer 6.2% share of Social Security (i.e., OASDI) employment taxes on wages paid in 2010 to newly hired qualified individuals. These are workers who: (1) begin employment with the employer after Feb. 3, 2010 and before Jan. 1, 2011, (2) certify by signed affidavit, under penalties of perjury, that they haven't been employed for more than 40 hours during the 60-day period ending on the date the individual begins employment with the qualified employer; (3) do not replace other employees of the employer (unless those employees left voluntarily or for cause), and (4) aren't related to the employer under special definitions. The payroll tax relief applies only for wages paid from Mar. 19, 2010 through Dec. 31, 2010.
Employers may qualify for an up-to-$1,000 tax credit for retaining qualified individuals. The workers must be employed by the employer for a period of not less than 52 consecutive weeks, and their wages for such employment during the last 26 weeks of the period must equal at least 80% of the wages for the first 26 weeks of the period.
The IRS has issued guidance on these tax breaks in the form of frequently asked questions. They carry valuable information on subjects such as the scope of the exemption, how it interacts with other tax breaks, and when an employer must receive the employee's certification of former unemployment status. For example, the IRS explains that the exemption and credit can be claimed for a new employee replacing a downsized employee.
Detailed guidance released on new small business health care credit.
The IRS has issued detailed guidance on the small employer health insurance credit created by the recently-enacted health reform legislation. Under the new law, effective for tax years beginning after Dec. 31, 2009, an eligible small employer (ESE) may claim a tax credit for nonelective contributions to purchase health insurance for its employees. An ESE is an employer with no more than 25 full-time equivalent employees (FTEs) employed during its tax year, and whose employees have annual full-time equivalent wages that average no more than $50,000. However, the full credit is available only to an employer with 10 or fewer FTEs and whose employees have average annual full-time equivalent wages from the employer of not more than $25,000. The new guidance adopts a liberal approach to the new law's requirements, including three alternative methods for figuring total hours of service (important for determining how may FTEs an employer has), and also explains how small employers claim the credit if their State provides a credit or subsidy for employee health coverage. The IRS has released a state-by-state table of average health insurance premiums for the small group market for the 2010 tax year. The table is needed to calculate the credit for this year.
Guidance issued on new under-age-27 rule for health coverage of children.
The IRS has issued guidance on the tax treatment of health coverage for children under age 27 under the new health reform law. The new under-age-27 rule, which went into effect March 30, 2010, applies broadly to employer-provided coverage or reimbursements, cafeteria plans, flexible spending arrangements (FSAs), health reimbursement arrangements (HRAs), voluntary employees' beneficiary associations (VEBAs), and the above-the-line deduction for a self-employed individual's medical care insurance costs.
Availability of FICA exception for medical residents to be resolved.
The Supreme Court has agreed to review a 2009 decision of the Court of Appeals for the Eighth Circuit, which upheld the validity of regulations that generally prevent medical residents from qualifying for the FICA student exception. Under these regulations, an employee includes a medical resident who works 40 hours or more for a school, college or university is not eligible for the student exception. The Supreme Court will now decide their validity. Its decision will have important ramifications for the many teaching hospitals and their residents.
Deadline extended for retirement plans in federally declared disaster areas in eight States.
The IRS has administratively extended to July 30, 2010, the April 30, 2010, deadline for restating affected pre-approved defined contribution plans and, if applicable, for submitting determination letters to the IRS, and the Code Sec. 401(b) remedial amendment period for these retirement plans. The relief applies to sponsors of defined contribution plans that were affected by the storms and other severe weather in counties in Alabama, Connecticut, Massachusetts, Mississippi, New Jersey, Rhode Island, Tennessee and West Virginia that were federally declared disaster areas in the period from March 1 through May 31, 2010.
Temporary regulations fill in statutory gaps on new indoor tanning tax.
The IRS has issued temporary regulations on the health reform's legislation's new 10% excise tax on indoor tanning services provided on or after July 1, 2010. The regs address practical considerations that may not have been contemplated when the law was drafted. For example, they addresses prepayments for tanning services and services provided as part of a gym membership.
Email if you would like more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.
Deadline extended for closing home purchase to qualify for homebuyer credit.
Relief has been provided to taxpayers who couldn't meet a key June 30, 2010, closing date for qualifying for the homebuyer credit. In general, both the regular first-time homebuyer credit of $8,000 and the reduced credit of $6,500 for long-term residents expired for homes purchased after Apr. 30, 2010. However, if a written binding contract to purchase a principal residence was entered into before May 1, 2010, the credit could be claimed if the purchase closed before July 1, 2010. Under the relief measure, if a written binding contract to purchase a principal residence was entered into before May 1, 2010, the credit may be claimed if the purchase is closed before Oct. 1, 2010. Thus, this extension allows homebuyers who signed a contract no later than the April 30th deadline to complete their closing by the end of September.
Guidance addresses tax breaks for hiring new employees.
Employers are exempted from paying the employer 6.2% share of Social Security (i.e., OASDI) employment taxes on wages paid in 2010 to newly hired qualified individuals. These are workers who: (1) begin employment with the employer after Feb. 3, 2010 and before Jan. 1, 2011, (2) certify by signed affidavit, under penalties of perjury, that they haven't been employed for more than 40 hours during the 60-day period ending on the date the individual begins employment with the qualified employer; (3) do not replace other employees of the employer (unless those employees left voluntarily or for cause), and (4) aren't related to the employer under special definitions. The payroll tax relief applies only for wages paid from Mar. 19, 2010 through Dec. 31, 2010.
Employers may qualify for an up-to-$1,000 tax credit for retaining qualified individuals. The workers must be employed by the employer for a period of not less than 52 consecutive weeks, and their wages for such employment during the last 26 weeks of the period must equal at least 80% of the wages for the first 26 weeks of the period.
The IRS has issued guidance on these tax breaks in the form of frequently asked questions. They carry valuable information on subjects such as the scope of the exemption, how it interacts with other tax breaks, and when an employer must receive the employee's certification of former unemployment status. For example, the IRS explains that the exemption and credit can be claimed for a new employee replacing a downsized employee.
Detailed guidance released on new small business health care credit.
The IRS has issued detailed guidance on the small employer health insurance credit created by the recently-enacted health reform legislation. Under the new law, effective for tax years beginning after Dec. 31, 2009, an eligible small employer (ESE) may claim a tax credit for nonelective contributions to purchase health insurance for its employees. An ESE is an employer with no more than 25 full-time equivalent employees (FTEs) employed during its tax year, and whose employees have annual full-time equivalent wages that average no more than $50,000. However, the full credit is available only to an employer with 10 or fewer FTEs and whose employees have average annual full-time equivalent wages from the employer of not more than $25,000. The new guidance adopts a liberal approach to the new law's requirements, including three alternative methods for figuring total hours of service (important for determining how may FTEs an employer has), and also explains how small employers claim the credit if their State provides a credit or subsidy for employee health coverage. The IRS has released a state-by-state table of average health insurance premiums for the small group market for the 2010 tax year. The table is needed to calculate the credit for this year.
Guidance issued on new under-age-27 rule for health coverage of children.
The IRS has issued guidance on the tax treatment of health coverage for children under age 27 under the new health reform law. The new under-age-27 rule, which went into effect March 30, 2010, applies broadly to employer-provided coverage or reimbursements, cafeteria plans, flexible spending arrangements (FSAs), health reimbursement arrangements (HRAs), voluntary employees' beneficiary associations (VEBAs), and the above-the-line deduction for a self-employed individual's medical care insurance costs.
Availability of FICA exception for medical residents to be resolved.
The Supreme Court has agreed to review a 2009 decision of the Court of Appeals for the Eighth Circuit, which upheld the validity of regulations that generally prevent medical residents from qualifying for the FICA student exception. Under these regulations, an employee includes a medical resident who works 40 hours or more for a school, college or university is not eligible for the student exception. The Supreme Court will now decide their validity. Its decision will have important ramifications for the many teaching hospitals and their residents.
Deadline extended for retirement plans in federally declared disaster areas in eight States.
The IRS has administratively extended to July 30, 2010, the April 30, 2010, deadline for restating affected pre-approved defined contribution plans and, if applicable, for submitting determination letters to the IRS, and the Code Sec. 401(b) remedial amendment period for these retirement plans. The relief applies to sponsors of defined contribution plans that were affected by the storms and other severe weather in counties in Alabama, Connecticut, Massachusetts, Mississippi, New Jersey, Rhode Island, Tennessee and West Virginia that were federally declared disaster areas in the period from March 1 through May 31, 2010.
Temporary regulations fill in statutory gaps on new indoor tanning tax.
The IRS has issued temporary regulations on the health reform's legislation's new 10% excise tax on indoor tanning services provided on or after July 1, 2010. The regs address practical considerations that may not have been contemplated when the law was drafted. For example, they addresses prepayments for tanning services and services provided as part of a gym membership.
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