The Internal Revenue Service is now accepting e-files. The new tax year 2015 is now underway so you should be closing your books and thinking about hiring a good business accountant. Tax filing is challenging enough, but small business owners may be particularly unhappy this year:
1.Impact Of Health Care Reform
Health Care Reform under the Affordable Care Act (ACA) does create reporting headaches for small businesses.There is a small business health care tax credit for small businesses that provide health insurance. To get the credit, however, you must supply such information as employee name, hours worked, pay, premium amounts and more. Whew!
Don’t forget about W-2’s that are due to employees by January 31! Small businesses MUST report health insurance and other health coverage information correctly or face a $100 penalty (BTW, IRS is trying to take a position that there is no statute of limitations for “incorrect information statements”).
2.Rules Regarding Repairs and Capitalization Of Assets
IRS has issued rules to clarify when the cost of a tangible asset can be expensed and they should be capitalized. These regulations must be followed by small businesses and imposes many additional administrative requirements.
For starters, small businesses need to consider having a written Repair & Capitalization Policy. Without a written Repair & Capitalization Policy, it is possible that ALL expenditures have to be capitalized & depreciated!
The new regulations also require a careful review by YOU of all purchase invoices to determine if it is an expenditure that needs to be capitalized and depreciated.
Finally, the new rules may require you to attach a de minimis election statement or file a complex “change in accounting method” form with your tax return.
These new rules are strict and complex and have been overlooked with the hype over health care!
3.Cutbacks Mean Decline In Service From IRS
Times are lean at the IRS. Congress has significantly slashed its budget leaving IRS with its lowest level of funding since 1998.
The funding reductions have forced the loss of 12,000 positions at the tax agency. Fewer workers mean a decrease in customer service.
If you call the help lines, or go to a help center, expect to wait 30 minutes, if not an hour or more, for assistance.
Although IRS has not commented, the budget cuts probably also mean delays in answering replies to correspondence.
New Health Care Reform, New Repair & Capitalization Regulations, and Declining IRS Service all mean a loss of productive time for the small business owner trying to grow a business!
Kasperek & Co. Accountants is not intimated by these challenges. Team up with us and we can work this out together.