Special Year End Business Considerations for 2015

2015This end of year consideration blog is very different from past years.  Business owners are now on the hook for reporting more than ever and employers and employees alike have many more considerations than last year.

Mandatory Affordable Care Act reporting starts next month.  Do not do this alone!!!  Usually the folks from accounting or tax area of the employer, HR, and someone from payroll do not meet nor talk to each other.  That just changed.  You need to determine the following:

  1. Are you a large employer?  Do not think that you are classified otherwise just because you have either union or PEO people in your organization.  For IRS purposes these folks count.
  2. Are the plans affordable?  As hard as it is to purchase one that is not you need to check and make sure.  A false assumption could be very expensive this year.
  3. Does the plan offer minimum essential coverage?  Providers of minimum essential coverage are required to furnish a statement for each covered individual by Jan. 31.

Even if you do not offer medical coverage the law now requires all of your employees to provide their own.  Are they getting a subsidy?  Did they get a raise this year?  Did they start working for you this year after a long stint of unemployment?  All of these factors will hit everyone for the filing of taxes for CY2015.  The fine for not having health insurance has increased to the higher of 2.5% of household income or $695 per adult ($347.50 per child under 18).

And that is not all.  For those getting a subsidy the out of pocket costs have increased.  I have a client whose son had a plan for $230 a month that was getting a subsidy of $170 a month.  The cost for the plan for 2016 has increased to $270 a month, but since the subsidy is indexed to the Cost Of Living index (which is zero this year) his out of pocket expenses when from $60 to $100 a month, a 67% increase.

Finally, folks who were using the file and suspend section of the Senior Citizens Freedom to Work Act in 2000 just got the rug pulled out from under them.  That is now gone, dead, and vanished thanks to Section 831 of the 2015 Budget Legislation that loses Social Security “Loopholes”.  While this only affects seniors in the USA it decreases their take home pay by a large percentage.  Basically, if you filed for your benefits, then your spouse filed for their spousal benefits, then you “suspended” the original benefits, the spouse could continue to receive their spousal benefits.  If you do not understand this then it probably does not apply to you.  However, the IRS figures this has been costing somewhere in the neighborhood of $9.8 billion in revenues.

Running, owning, working, or retiring from any business has never been this complicated.  Pay attention to your professionals.  If you are not currently using any professionals for the administration of your business you better start or you will face some business ending consequences.

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