TWO IMPORTANT TAX LAW CHANGES

Jun 18, 2014 | Prescott Accounting

June 2014

TWO IMPORTANT TAX LAW CHANGES TO NOTE:

1. Beginning in 2014, the IRS is required to file Form 8822-B to notify the IRS of a change in the entity’s responsible party. This is especially important for non-profit organizations who name the Treasurer or President (or any other Board Member or Executive Director) as the “responsible person” on the entity tax return and there is turnover on the Board.

This is the individual the IRS has on record for sending notices and other correspondence to. If this person is no longer connected to the organization, any notices may not get to the current responsible person and there could be serious consequences when notices go unanswered.

The Form may be found on IRS.gov and requires minimal information.

2. The Affordable Care Act has brought numerous changes, but one particular rule can have significant consequences. The ruling eliminates an employer’s ability to use a stand-alone health reimbursement arrangement to help employees pay for individual health insurance policies on a tax-free basis.

An exception to this is to offer reimbursement for limited-scope vision and dental benefits if they are provided under separate policy. Also, employees may still purchase coverage on a SHOP Exchange on a pre-tax basis using the employer’s cafeteria plan if the employer offers SHOP coverage to its employees.
We suggest contacting an insurance company if you have questions on your particular health coverage for employees as there are many factors that come into play. We bring this to your attention as the penalties for violating the Health Care Act Rules on this issue can be up to $100 per employee.

 

This tip brought to you by Schutte & Hilgendorf, PLLC, CPA’s, a Prescott firm serving the greater Yavapai County, providing audit, accounting, bookkeeping, tax preparation and planning, QuickBooks accounting and setup to individuals and businesses.

Contact us for a free initial consultation at (928) 778-0079.

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