Hiring For the Summer? Know the ACA Rules

If you're an employer, what you have to do to comply with Affordable Care Act (ACA) rules depends on the size of your workforce. When you have 50 or more full-time employees – a total that can include seasonal workers – you have to deal with additional reporting and coverage requirements known as the "employer shared responsibility" provisions. Those provisions mean you need to offer a minimum level of affordable health coverage to full-time employees and their dependents. Otherwise you may have to pay a penalty, if even one of your full-time employees receives a tax credit for buying individual coverage on the government health insurance website.

What's a full-time employee?
 A worker who averages 30 or more hours per week (or 130 hours per month) is considered full-time. But you also need to consider "full-time equivalent" employees. You can determine how many full-time equivalent employees you have by multiplying the number of part-time employees by average hours worked, and dividing the result by the hours required for full-time status. For example, 20 employees working an average of 15 hours per week are equivalent to 10 full-time employees (20 employees times 15 hours divided by 30 hours).

Seasonal employees are generally included in the computation.
 However, there is an exception you'll want to be aware of. Say your workforce exceeds 50 full-time and full-time equivalent employees for 120 days or fewer during a calendar year. If, during that period, the employees in excess of 50 were seasonal workers, you're generally not subject to the employer shared responsibility provisions. What if your workforce exceeds the limit? You may have to offer health insurance to seasonal workers who meet specific weekly work-hour requirements during a look-back "measurement period." The measurement period is a specified number of months during which you track an employee's hours.
ACA requirements apply to nearly every employer in some form, and the rules get complicated quickly.
Please contact us for details.
Call us at (219) 769-3616 with your questions, or email them to dvanprooyen@swartz-retson.com.

Tax News - 2016 Changes to Note

Effective beginning with 2016 taxable years, the de minimis tangible property safe harbor has increased to $2,500 per invoice or item. The change affects regulations issued in 2013 that clarified when your business could expense tangible real and personal business property. Previously, the de minimis safe harbor let you elect to deduct individual capital expenditures of $500 or less if your business did not have an “applicable financial statement.” (In general, an applicable financial statement is a financial statement based on a certified audit by an accounting firm.)

The extender legislation passed in December made changes to ABLE accounts. ABLE accounts – named for the Achieving a Better Life Experience Act that created them – are tax-beneficial savings accounts for qualified individuals with disabilities. The extender legislation eased the requirement that you had to open the account in the beneficiary’s state of residence. Now you are free to open an ABLE account with any state program you choose.

Three Section 179 expensing deduction changes may affect your 2016 tax planning. First, the $2,000,000 phase-out limit was adjusted for inflation and is $2,010,000 for 2016. (The $500,000 deduction amount did not change.) Second, you may be able to deduct more of qualified leasehold, retail, and restaurant property in 2016.
The $250,000 cap on the amount of Section 179 you could claim for this property was eliminated. Third, air conditioning and heating units are now eligible for Section 179 expensing.

You have new options for funding your myRA this year. In the past, you could fund your account from your paycheck by completing a direct deposit authorization form and giving it to your employer. That option is still available. In addition, now you can choose to make direct deposits from a checking or savings account or from your federal income tax refund. A myRA (my Retirement Account) is a simplified Roth IRA that costs nothing to open, has no fees, and lets you start saving with any amount that fits your budget. The maximum contribution for 2016 is $5,500 ($6,500 when you're age 50 or older at the end of the year).

Call us at (219) 769-3616 with your questions, or email them to tlynch@swartz-retson.com.

IRS Warns of Impersonation Telephone Scam

The Internal Revenue Service recently highlighted an aggressive and sophisticated phone scam targeting taxpayers, including recent immigrants, that has been making the rounds throughout the country. Callers claim to be employees of the IRS, but are not. These con artists can sound  convincing when they call. They use fake names and bogus IRS identification badge numbers. They may know a lot about their targets, and they usually alter the caller ID to make it look like the IRS is calling.

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver's license. In many cases, the caller becomes hostile and insulting.

Or victims may be told they have a refund due to try to trick them into sharing private information. The latest variation being seen in the last few weeks tries to play off the current tax season. Scam artists call saying they have your tax return, and they just need to verify a few details to process your return. The scam tries to get you to give up personal information such as a Social Security number or personal financial information, such as bank numbers or credit cards.

If the phone isn't answered, the scammers often leave an "urgent" callback request.

"These schemes continue to adapt and evolve in an attempt to catch people off guard just as they are preparing their taxreturns," said IRS Commissioner John Koskinen. "Don't be fooled. The IRS won't be calling you out of the blue asking you to verify your personal tax information or aggressively threatening you to make an immediate payment."

Note that the IRS will never:
1. Call to demand immediate payment, nor will the agency call about taxes owed without first having mailed you a bill;
2. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe;
3. Require you to use a specific payment method for your taxes, such as a prepaid debit card;
4. Ask for credit or debit card numbers over the phone; or
5. Threaten to bring in local police or other law-enforcement groups to have you arrested for not  paying.

The IRS has information online (www.irs.gov) that provides additional details and can help protect taxpayers from phone
scams.
Call us at (219) 769-3616 with your questions, or email them to tlynch@swartz-retson.com.

IRS Warns of Surge in Email Schemes

The Internal Revenue Service recently renewed a consumer alert for email schemes after seeing an approximate 400 percent surge in phishing and malware incidents so far this tax season.
The emails are designed to trick taxpayers into thinking these are official communications form the IRS or others in the tax industry, including tax software companies. The phishing schemes can ask taxpayers about a wide range of topics. Email scan seek information related to refunds, filing status, confirming personal information, ordering transcripts and verifying PIN information. When people click on these email links, they are taken to sites designed to imitate an official-looking website, such as IRS.gov. The sites ask for Social Security numbers and other personal information. The sites may also carry malware, which can infect people's computers and allow criminals to access your files or track your keystrokes to gain information.

What to look for in these scams:
Taxpayers receive an official-looking email from what appears to be an official source, whether the IRS or someone in the tax industry.

The underlying messages frequently ask taxpayers to update important information by clicking on a web link. The links may be masked to appear to go to official pages, but they can go to a scam page designed to look like the official page. The IRS urges people not to click on these links, but instead send the email to phishing@irs.gov.

Recent email examples the IRS has seen include subject lines and underlying text referencing:
• Numerous variations about people's tax refunds.
• Update your filing details, which can include references to W-2.
• Confirm your personal information.
• Get my IP PIN.
• Get my E-file PIN.
• Order a transcript.
• Complete your tax return information.

It is important to keep in mind the IRS generally does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. The IRS has information online (www.irs.gov) that can help protect taxpayers from email scams.

Call us at (219) 769-3616 with your questions, or email them to tlynch@swartz-retson.com.