Some tax benefits will increase in 2016

Some tax benefits will increase in 2016

 Each year, the IRS announces inflation adjustments for more than 50 tax provisions. Knowing these numbers can help with your year-end tax planning. Changes for 2016 (for the tax returns you'll file in early 2017) include an increased standard deduction when you file as head of household ($9,300 for 2016). The standard deduction amounts remain the same as they were for 2015 when you're single or married filing separate ($6,300), or married filing jointly ($12,600). Please call us about other inflation adjustments.

Make use of your 2015 gift tax exclusion

Make use of your 2015 gift tax exclusion

This year you can give up to $14,000 to as many individuals as you want without any gift tax liability. If you're married and your spouse joins in the gift, you can, as a couple, elect to give $28,000 to each person with no gift tax liability. Once December 31, 2015, has come and gone, your 2015 gift tax exclusion is also gone. If you plan to make gifts this year, remember that your gifts must be completed by then.

Should you increase your withholding?

Should you increase your withholding?

Will the federal income tax withheld from your wages be enough to meet your 2015 federal income tax liability? If not, you can choose to make estimated tax payments. However, you should be aware that the penalty rules for underpayment of estimated taxes is applied to each installment – meaning you may owe a penalty when your estimated tax payments (plus withholding) total less than 25% of your required annual payment. Increasing your withholding for the last two months of the year can help you avoid this penalty. Contact us to learn how the estimated tax rules apply to you.

Tax planning is good for corporations too

Tax planning is good for corporations too

 If you own a calendar-year corporation, you can benefit from planning moves you make before December 31. For example, corporations can accelerate or defer income or deductions to stay within a certain tax bracket. You'll also want to look at your corporate alternative minimum tax exposure to determine whether you qualify for an exception to the tax. Finally, reviewing estimated tax payments can save penalties. Call us for more business planning strategies.

Be aware of credit card "liability shift"

Be aware of credit card "liability shift"

Does your business accept credit cards? You may already know of the recent update to a new style of cards embedded with microchips. This new technology, also known as EMV (for Europay, MasterCard, Visa), makes credit card fraud more difficult. Your business is not required to move to the new technology to process these cards. But you should be aware that as of October 1, 2015, your business is responsible for some fraudulent transactions that were previously covered by the cardholder's bank. Give us a call for details.

2016 health care enrollment begins November 1

2016 health care enrollment begins November 1

The health insurance Marketplace (www.healthcare.gov) "open enrollment period" began November 1 for 2016 individual health insurance coverage. Open enrollment is the annual period of time during which health insurance companies must accept your application regardless of your health history. Once open enrollment is over – January 31, 2016, for 2016 policies – you can only get coverage if you have circumstances that allow you to qualify for a special enrollment period.

Turn your part-time employees into winners

Turn your part-time employees into winners.

Part-time employees play a valuable role in a small business. They help deal with fluctuations in workload and can job-share with full-timers. In addition, because part-timers often look for flexibility in hours, you may find a skilled worker whose schedule fits perfectly with existing staff.

But part-timers can turn into a liability if not managed well. You could end up with poorly motivated workers who are unsure of their duties, unfamiliar with your company, and uncertain who they report to. Here are tips to keep this from happening.

Think before you hire. Decide what you want your new employee to do, what work hours are expected, and who he or she will report to. Does the position have well-defined duties? Or does the work involve filling in wherever needed? Decide on the pay and benefits.

Communicate clearly with your new part-timer. Explain the required duties and the chain of authority. Be very clear on hours and benefits, while remaining flexible enough to accommodate school or other commitments.

Communicate clearly with your full-time staff. Explain why you're hiring a part-time employee. Clarify what the new employee will and will not be expected to do. Designate who will manage and assign work to the part-timer.

Make the part-timer feel like part of the company. Provide introductory training on specific duties and the company's business and policies. Assign a mentor or "buddy" – someone the new person can turn to with everyday questions.

Monitor progress. Don't forget about your new employee after hiring. Provide feedback on performance and recognition for tasks well done.

With a sound plan, hiring a part-time employee can be a win-win situation.