Our partner and tax consultant, Ed Lyon of AccounTax, Inc. shares some interesting information about how you may be able to write off your next vacation. Follow these tips for compliance:
Related Post — Lending Money to Family? Make It a Tax-Smart Loan
1. Make all your business appointments before you leave for your trip.
2. Make Sure your Trip is All “Business Travel.”
3. Be sure to deduct all of your on-the-road-expenses for each day you’re away.
4. Sandwich weekends between business days.
5. Make the majority of your trip days count as business days.
Related Post: Breaking Down The Employer Mandate Tax Penalties
Click here to read the full explanation of tips and examples. Ed Lyon has also created an informative webinar to help you understand Section 105 Plans after Obamacare.
To learn more, please contact Ed Lyon at 513-324-2912 or email@example.com.
With the enactment of the Affordable Care Act and Health Care and Education Tax Credits Reconciliation Act of 2010, comes new provisions and changes to the US tax code, creating tax implications for individuals and businesses.
Healthcare Exchanges (Marketplaces) are now open – some are run by the state you live in, while others are run by the federal government. Please visit the ClaimLinx Exchange for more information.
Related Post: 2014 Tax Changes Checklist
2014 Health Care Reform Law & Tax Provisions:
- Individual health care minimum essential coverage mandate/penalties/subsidies.
- Individuals may be eligible for the new advance Premium Tax Credit that will lower your monthly premium.
- In 2014, the basic penalty for individuals not adhering to the mandate is $95 or 1% of your yearly income (whichever
- is higher), with substantial increases in subsequent years.
- Exchanges are available to individuals and small businesses.
- Small Employer Health Care Tax Credit
- No annual limits on coverage in grandfathered individual and group plans.
- No preexisting condition exclusions for individuals.
- Employee awards for wellness programs permitted
- Annual fee on health insurance providers (for net premiums written after 2012).
- Increases in required estimated tax payments for large corporations.
- Flexible Spending Arrangements (FSA) contributions are limited to $2,500 per year starting in 2013 and indexed for inflation after that.
Related Post: US Health Spending Expected to Grow 5.8% Annually
For more information please visit the Health Care Reform section on our website. For a free brochure, please email firstname.lastname@example.org.
If you have additional questions, please feel free to contact us at 513-677-6262; (800) 858-1772 or email@example.com – we would be happy to help.
One of our tax advisors, Dave Toney of AccountTax, offers these tips when lending money to family.
While lending money to a cash-strapped family member or friend is a noble and generous offer, you need to plan ahead before handing over the cash to avoid tax complications.
Let’s say you decide to loan $5,000 to your daughter who’s been out of work for over a year and is having difficulty keeping up with the mortgage payments. While you may be tempted not to charge an interest rate, you should resist the temptation because:
- When you make an interest-free loan to someone, you will be subject to “below market interest rules”. IRS rules state that you need to calculate imaginary interest payments from the borrower, which are then paid to you. You will be required to pay taxes on these interest payments when you file a tax return. Further, if the imaginary interest payments exceed $14,000 for the year, there may be adverse gift and estate tax consequences.
- The exception is for small loans of $10,000 or less. The IRS lets you ignore the rules for small loans as long as the aggregate loan amounts to a single borrower are less than $10,000 and the borrower doesn’t use the loan proceeds to buy or carry income-producing assets.
- In addition, if you don’t charge any interest, or charge interest that is below market rate, then the IRS might consider your loan a gift, especially if there is no formal documentation (i.e. written agreement with payment schedule). It is best to have a written promissory note that includes the interest rate, a repayment schedule showing dates and amounts for all principal and interest, and security or collateral for the loan, such as a residence. Make sure that all parties sign the note so that it’s legally binding.
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As long as you charge an interest rate that is at least equal to the applicable federal rate (AFR) approved by the Internal Revenue Service, you can avoid tax complications and unfavorable tax consequences.
If you have questions about the tax implications of loaning a family member money, don’t hesitate to contact us at firstname.lastname@example.org or view our website here.