Archive for April, 2010
Periodically we will be doing a survey on issues that our clients and friends of the firm are keen to have more data on with respect to what other organizations are doing. This month’s survey deals with wage freezes, restoration of benefits, and average wage increases. Please complete the survey by clicking the following link.
http://www.greenwaltcpas.com/contact-us/bipoll/
Our goal is to turn the poll results around quickly and share them with you in two weeks. Please let us know if there are other hot topics you would like to have us survey.
by Jennifer, McVey, CPA, Manager and Amanda Meko, CPA, Partner
Members of the Not-for-Profit Services
If you want to impress potential lenders and funders, you need to show them that you measure your organization’s financial health with care and frequency. Presenting timely audited financial statements upfront can make the difference between being turned down for a loan and getting one as well as obtaining crucial contributions from donors.
Greenwalt CPAs once again ranked in the top five companies in the small company sector (50 to 149 employees). Central Engineering and Construction Associates, Inc., and Indiana Hemophilia and Thrombosis Center , clients of the firm were honored as well. The rankings are based upon an independent employee survey which covered a variety of aspects of the workplace, including training, management, benefits, appreciation, ethics, and work/life balance. Greenwalt CPAs ranked fourth overall in the small company sector, and was ranked #1 in training among all categories (large workplaces, midsize and small).
Employees said that the Firm’s family-friendly workplace is one of our biggest assets. We will be receiving a more detailed analysis of the results, which we will use to determine areas where we can further improve.
See the Indy Star article about Greenwalt CPAs, Inc here.
by Stacey L. Spencer, QKA, Manager, Employee Benefit Services Group
Every year it is important that you review the requirements for operating your 401(k) retirement plan. The Internal Revenue Service (IRS) has released a list of the 10 most common mistakes made in the administration of 401(k) Plans. This checklist offers a starting point for developing internal controls regarding plan compliance procedures. If you would like assistance in establishing or reviewing your company’s internal controls, please contact us to schedule a free review.
Representing a sweeping overhaul of the U.S. health care system, the Patient Protection and Affordable Care Act was signed into law on March 23, and its companion reconciliation act was signed into law last week. Here’s a brief summary of the main tax provisions affecting individuals and businesses.
Individual tax provisions
Important tax provisions affecting individuals include:
Penalties for the uninsured. Beginning in 2014, most individuals who aren’t eligible for Medicaid, Medicare or other government-provided coverage will have to purchase minimum essential health coverage. Those who fail to do so will be hit with a penalty (with exceptions for the poor and certain others).
Premium assistance for those with lower incomes. Beginning in 2014, people with income between 133% and 400% of the federal poverty level (FPL) are eligible for tax credits or cost-sharing subsidies on a sliding scale to help pay insurance premiums.
Higher taxes on the affluent. To help offset the act’s cost, affluent taxpayers will face higher taxes. Beginning in 2013, taxpayers with more than $200,000 in earned income ($250,000 for families) will pay an additional 0.9% Medicare tax on the excess. In addition, those with an adjusted gross income (AGI) over $200,000 ($250,000 for joint filers) will pay a new, 3.8% Medicare tax on unearned income, such as interest, dividends, rents, royalties and certain capital gains. The tax doesn’t apply to retirement plan distributions.
Also starting in 2013, the act raises the threshold for deducting unreimbursed medical expenses from 7.5% to 10% of AGI and limits contributions to flexible spending accounts for medical expenses.
Business tax provisions
Key tax provisions affecting businesses include:
Penalties for failure to provide coverage. The Patient Protection act doesn’t require employers to provide insurance coverage, but starting in 2014 it imposes tax penalties on certain employers that don’t provide it. Employers with 50 or more full-time-equivalent workers (FTEs) that don’t offer coverage and have at least one full-time employee who receives a premium tax credit are subject to an annual fee of $2,000 per FTE (not including the first 30 FTEs).
Tax credits for small businesses. Starting this year, small businesses are entitled to tax credits for purchasing group health coverage. For tax years 2010 to 2013, the maximum credit is 35%, provided the employer contributes at least 50% of the total premium or 50% of a benchmark premium. Starting in 2014, a maximum credit of 50% is available for two years for employers that purchase coverage through a state exchange and contribute at least 50% of the total premium. Smaller credits are available for tax-exempt businesses.
Excise tax on “Cadillac” plans. Starting in 2018, high-cost group plans will be subject to a 40% nonrefundable excise tax. The tax applies to annual premiums in excess of $10,200 for individual coverage and $27,500 for family coverage (excluding stand-alone dental and vision plans). The thresholds are higher ($11,850 and $30,950, respectively) for retirees and employees in certain high-risk professions. These amounts will be indexed for inflation.
An all-encompassing act
The tax provisions of the Patient Protection act will have an impact on most taxpayers, as well as on how employers deal with health care insurance for their employees. Please contact us if you have questions about how the provisions may affect you or your business.