New IRS Tool to Look Up Tax Preparer Disciplinary Records

The IRS Office of Professional Responsibility (OPR) has created an online lookup table — a searchable Excel file — that allows the public to find out if a tax practitioner has been reported for violations of their professional responsibility.  Until this new tool was released, one had to search every single IRS Bulletin for announcements.  Now the information is compiled into one document.  It includes 25 years of info (the IRS requirement for maintaining records on the topic) on more than 3,000 censures, suspensions, disbarments and other restrictions.

More info here, including how best to search the file: IRS Makes It Easier to Look Up Disciplinary Records of Tax Practitioners

I’ve inherited enough clients from unscrupulous prior preparers, that I intend to make searching this document a standard practice before beginning a new client’s return.

Congress Eliminates IRS Penalty on Employer Reimbursements for Health Insurance

The most popular post on my blog has always been the one explaining that HRAs (Health Reimbursement Arrangements) were no longer legal (as of mid-2015).  Well… that’s all changed.

The Senate passed legislation Wednesday eliminating a tax penalty on employers who reimburse employees for the cost of health insurance premiums, following passage of the measure last week in the House.

Source: Congress Eliminates IRS Penalty on Employer Reimbursements for Health Insurance

President Obama has already signed it into law, and it goes into effect January 1st.  Joe Biden’s really excited about it.

Title 18 of the new law, originally a separate bill called the Small Business Healthcare Relief Act, allows companies to use Health Reimbursement Arrangements to compensate employees who buy their own insurance.

Source: New Law Eases Small Business Health Care Burden

Health reimbursement accounts, or HRAs, are more simply recognized as the practice of reimbursing employees for the cost of their health insurance.  The reason they were made illegal with the advent of the ACA makes sense — an employee might have a personal tax situation whereby they can get Marketplace health insurance subsidized by the government, and it’s cheaper for the employer to simply reimburse the employee for that insurance than for the employer to provide an insurance plan. However, that’s unfair to the rest of us, whose tax dollars go to paying for that subsidy.

Previously, stand-alone HRAs were considered noncompliant under federal law. Beginning in 2014, a joint notice from the Departments of Labor, Health and Human Services, and the Treasury subjected employers using these noncompliant plans to fines of up to $36,500 per employee per year.

Source: The SBHRA Heads to the White House—What It Means for Small Business

Apparently that inequity no longer matters.  The IRS fees were seen as exorbitant, and Congress saw that it was hurting small businesses, who may not have been trying to game the system — they simply did not want to take on the administrative headache of offering health insurance when they weren’t required to do so.

Please spread the word to your small business accounting clients or friends/colleagues who own businesses and have employees.

UPDATE 3/4/17 — IRS Notice 2017-20 extends the period for an employer that provides a qualified small employer health reimbursement arrangement (QSEHRA) to furnish a written notice to its eligible employees. The period is extended to at least 90 days after additional guidance regarding the contents of the QSEHRA notice is issued. The notice also provides transition relief from penalties for failure to furnish the written notice until after further guidance has been issued.

For more info on what qualifies as a QSEHRA, see the Department of Labor Q3 on page 5 of their FAQ released 12/20/16.

(In other words, hang tight — the how-to’s are still to come.)

2017 Standard Mileage Rates

Beginning on Jan. 1, 2017, the standard mileage rates will be:

  • 53.5 cents per mile for business miles driven, down from 54 cents for 2016
  • 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
  • 14 cents per mile driven in service of charitable organizations

The business mileage rate decreased half a cent per mile, and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged.

Source: IRS — 2017 Standard Mileage Rates for Business, Medical and Moving Announced

Comparing Income, Corporate, Capital Gains Tax Rates: 1916-2011

I recently rediscovered a pretty fascinating chart I originally found a couple years back (when looking for holiday presents for my father — yes, I was born a nerd and came by it honestly), comparing various top tax rates through history.  It only contains data up through 2011, but I’m hopeful the author, Catherine Mulbrandon, will update it again at some point.  All of her graphics are pretty interesting — clear and to-the-point — and her Visualizing Economics blog is worth a visit whether you’re an economics nerd or a graphic design nerd.

Reminder: your marginal tax rate is the rate you pay on the “last dollar” you earn; but when you view the taxes you paid as a percentage of your income, your effective tax rate is less than your marginal rate, especially after you take into account the deductions and exemptions, i.e. income that is not subject to any tax.

Source: Comparing Income, Corporate, Capital Gains Tax Rates: 1916-2011 — Visualizing Economics

Small Business Grant Contest

LendingTree is having a contest for small businesses where the prize is a $50,000 grant to the winning company — and while I don’t normally endorse or post about for-profit/ non-educational items, I recently had a client win one of these types of contests, and I couldn’t be happier for her or prouder.

So, I’m making the “share” and trying to get this out to as many small business owners as possible, since I recognize that it could be a huge benefit to a small business, and by extension, its surrounding community.

LendingTree is offering support in the form of a $50,000 grant to help one small business achieve even more success. Tell us about your business, how you would use the prize money and why your business deserves this grant for a chance to win. Opportunity is knocking!

Source: Small Business Grant Contest

CPA Academy Webinar – Financing Sources for Small Business Owners

Just a quick note about a FREE webinar coming up tomorrow (Tues, Dec 13) I just saw advertised on CPAacademy.org regarding financing sources for small business owners.  I’ve said it so many times: insufficient capital is one of the primary reasons for the failure of small businesses, and I’ve had too many clients fall prey to unscrupulous lenders that take advantage of their needy situation.

This may be one for both accountants and their clients to attend.

Learning Objectives

  • Understand the pros and cons as well as lender requirements for the main types of financing.
  • Learn about financing options for start-ups, business owners with poor personal credit, and other challenging situations.
  • Help your clients prepare for financing and avoid expensive pitfalls.
  • Get free tools you can use to help your clients evaluate costs and make better borrowing decisions.

Source: CPA Academy

2017 Tax Filing Season Begins Jan. 23; Tax Returns Due April 18

The IRS announced its official filing season dates today, and issued a number of suggestions and reminders to tax preparers and taxpayers, most importantly on the topics of delayed refunds and ITINs.  See their press release here: 2017 Tax Filing Season Begins Jan. 23 for Nation’s Taxpayers, Tax Returns Due April 18

QuickBooks Online Interface Overhaul

Our good friend Charlie Russell over at Accountex Report (formerly Sleeter) has helped us out once again by 1) warning us that QuickBooks Online is once again changing its interface and 2) letting us know what the changes are and how we’re likely to be affected and react.

His summary?  Meh, it’s fine — it’s not as major as the last time they did this, and it’s mostly being done to create consistency across all their online product platforms (which is a good thing).  His (and I couldn’t agree more) main complaint is that they need to keep these “redesigns” around for longer, allowing us to get used to them and become more efficient with our navigation and data entry.

The full article has lots of great screen shots and step-by-step info; I encourage a quick read (it’s only 2-pages long), as these changes are rolling out throughout the course of the month, and you’ll want to be on top of your game when doing financial reviews in January in anticipation of tax-time.

QuickBooks Online Interface Overhaul – Accountex Report