Beware of a 100% Personal Liability Penalty
A “100% penalty” can be assessed against a responsible person when federal income tax and/or federal employment taxes are withheld from employee paychecks but aren’t handed over to the government. This Trust Fund Recovery Penalty got its informal “100% penalty” moniker from the fact that the entire unpaid amount can be assessed against a responsible…
Keep Close Tabs on Cost Assessments
Your company is taking a gamble if it fails to perform sufficient price analyses for goods or services it proposes to use or has already purchased for a cost-based federal contract. Insufficient price assessments can mean the government will reject your enterprise’s cost proposals, increase scrutiny of its incurred costs and ultimately determine that its…
Change in Allowable Airfare: What’s the Impact?
Documentation can be challenging. A final rule was published in December of 2009 that revised the FAR cost principle on Travel Costs (FAR 31.205-46). The revision replaced the language “lowest customary standard, coach, or equivalent airfare” with “lowest priced airfare available to the contractor.” There has been much discussion as to whether the revision places…
Design Health Care FSAs to Be Cost-Effective
While health care flexible spending accounts (FSAs) offer tax-saving benefits to employees, they also can provide tremendous advantages to the employers sponsoring them. Salary-reduction contributions which employees make to an FSA are not subject to Social Security and Medicare (FICA) taxes. Thus, employers save the 7.65% FICA contribution on the dollars an employee contributes to…
Filing and Settling a Wrongful Death Claim
Money cannot replace a loved one who dies tragically. But it may provide help for the medical bills, funeral costs and the loss of income from the person who died. If the survivors believe the death was due to the negligent, reckless or intentional actions of another person or entity, they may seek economic and…
Answers to Your Questions about Marital Status and Tax Returns
When a couple ties the knot or gets divorced, taxes are probably not the first thing on their minds. But many decisions that couples make do affect their tax returns — and the amount they ultimately owe the federal government. Here are some answers to some frequently asked questions about marital status and taxes. Q. What…
Partner Retirement Payments With Better Tax Results
Payments made by a law partnership to buy out a retiring partner’s entire ownership interest are generally subject to self-employment tax. Careful planning can change that. We’ll explain how, but first, here is some background information. Payments made by a law partnership to buy out a retiring partner’s entire ownership interest are covered by Section…
New Law Revamps the Kiddie Tax
Congress enacted the so-called “kiddie tax” rules to prevent parents and grandparents in high tax brackets from shifting income (especially from investments) to children in lower tax brackets. Congress recently revamped this tax under the Tax Cuts and Jobs Act (TCJA). Trust and Estate Tax Rates for 2018 Use the following tax rates to compute…
Workers’ Comp Fraud Leads to Hot Water for Employers
Workers’ compensation is an important part of the employer-employee compact in all 50 states. Naturally the company’s owner is in business to make a profit after all expenses are paid. One of those expenses is the cost of workers’ compensation insurance to protect employees and to treat those employees who have job-related injuries or illnesses….
A Way to Increase Donor Confidence
Does your organization have “A Donor Bill of Rights?” This set of standards was created by the American Association of Fund-Raising Counsel (AAFRC), along with other philanthropic associations.* Many not-for-profit groups endorse these standards and state in their literature that they will adhere to them. The purpose of the 10-point “Donor Bill of Rights” is…