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COPIED FROM THE HEALTH INSURANCE EXCHANGE: Why Can't Employers Pay For Employees To Go To The Exchanges? by: Keith R. McMurdy November 18, 2014 inShare34 On November 6, the Department of Labor issued FAQ Part 22, which directly addresses some recent efforts by employers to reimburse employees for participation in the exchange through Code Section 105, or through some type of other arrangement. Here are the questions, with shortened answers. Q1: My employer offers employees cash to reimburse the purchase of an individual market policy. Does this arrangement comply with the market reforms? No. If the employer uses an arrangement that provides cash reimbursement for the purchase of an individual market policy, the employer’s payment arrangement is part of a plan, fund, or other arrangement established or maintained for the purpose of providing medical care to employees, without regard to whether the employer treats the money as pre-tax or post-tax to the employee. Under the Departments’ prior published guidance, the cash arrangement fails to comply with the market reforms because the cash payment cannot be integrated with an individual market policy. Q2: My employer offers employees with high claims risk a choice between enrollment in its standard group health plan or cash. Does this comply with the market reforms? No. PHS Act section 2705, as well as the nondiscrimination provisions of ERISA and HIPAA prohibit discrimination based on one or more health factors. Offering, only to employees with a high claims risk, a choice between enrollment in the standard group health plan or cash, constitutes such discrimination. Also, because the choice between taxable cash and a tax-favored qualified benefit (the election of coverage under the group health plan) is required to be a Code section 125 cafeteria plan, imposing an effective additional cost to elect coverage under the group health plan could, depending on the facts and circumstances, also result in discrimination in favor of highly compensated individuals in violation of the Code section 125 cafeteria plan nondiscrimination rules. Q3: A vendor markets a product to employers claiming that employers can cancel their group policies, set up a Code section 105 reimbursement plan that works with health insurance brokers or agents to help employees select individual insurance policies, and allow eligible employees to access the premium tax credits for Marketplace coverage. Is this permissible? No. The departments have been informed that some vendors are marketing such products. However, these arrangements are problematic for several reasons. First, the arrangements are themselves group health plans and, therefore, employees participating in such arrangements are ineligible for premium tax credits for marketplace coverage. The mere fact that the employer does not get involved with an employee’s individual selection or purchase of an individual health insurance policy does not prevent the arrangement from being a group health plan. Second, such arrangements are subject to the market reform provisions of the Affordable Care Act, including prohibition on annual limits and the requirement to provide certain preventive services without cost sharing. Such employer health care arrangements cannot be integrated with individual market policies to satisfy the market reforms and, therefore, will violate PHS Act sections 2711 and 2713, among other provisions, which can trigger penalties such as excise taxes under section 4980D of the Code. So if you are thinking the solution to compliance is to simply pay for your employee to participate in the exchange, make sure you understand the answers to these questions. Clearly the department is aware that employers have considered this as a solution and are giving it careful scrutiny

COPIED FROM THE ATX BOARD: Re: Customer service - NOT Actually, I see that another CS Rep already answered you via email. Support for the 2013 product ended Nov 14th- at that point, our phone system was changed to look at 2014 customer base when it checks the Client ID. Once you renew for the upcoming year, your CID will be activated for support. I apologize for the confusion- an Account Bulletin email that went out in early November mentioned this cut-off date. I'm going to locate that notice and repost to the blog since the date has passed now. Stephanie Bradford Customer Care Direct I just finished a 9/30 year end Corporate Tax Return. I wonder if i will be able to efile the return ???

A followup article in P C Magazine refers to Windows 10 as a fraud and says that really it's a patch of Windows 8 and more accurately should be called Windows 8.2 ! No kind words in this article.

Randall, You can find on the PC Magazine website

From BASE: New Guidance Impacts S Corporations & Self-Employed Health Insurance Deduction Latest DOL guidance prohibits employers from reimbursing individual premiums On November 6, 2014 the Department of Labor, Health and Human Services and the Treasury Departments issued new guidance regarding what arrangements do not comply with the ACA’s market reforms which may subject the employer to penalties. This latest guidance effectively puts an end to the S Corporation shareholders’ ability to take the 1040 deduction for their health insurance premiums. This change is effective immediately for the 2014 tax year and is for any S Corporation with 2 or more employees. The 1040 instructions for the Line 29 Self-Employed Health Insurance Deduction are very specific, and in order to qualify for this deduction the health insurance premiums paid or reimbursed by the S Corporation must be shown as wages on the W-2. Additionally the instructions maintain that “You can deduct the premiums only if the S Corporation reports the premiums paid or reimbursed as wages in Box 1 of Form W-2 in 2014 and you also report the premium payments or reimbursement as wages on Form 1040, line 7”. The latest Department of Labor, Health and Human Services and the Treasury Departments guidance prohibits all employer provided arrangements, with 2 or more employees, that reimburse individual health insurance premiums without regard to whether the employer treats the money as pre-tax or post-tax income to the employee. Since the individual premiums cannot be shown as income on the Form W-2, the S Corporation shareholder’s are unable to meet the criteria of the Self-Employed Health Insurance Deduction. Since I have been running S Corp Owner Health Insurance Premiums thru Payroll, it looks like I will be reversing all of their Health insurance Premiums.

Today I watched a short video about all the upcoming features for Windows 10 to be released in about 12 months. Aren't the changes in technology amazing

Obviously, since someone with less than solid moral/ethical standards can pass a background check and receive a security clearance.

My ATX Sales Rep just called me and offered me 10 % off if I renewed by the end of November and paid in full.

I worked as the controller for 12 years for a 300 employee wholesale distribution co that made deliveries to small restaurants, bars, small retail stores etc. During those years, i was personally involved in investigating about 8 different employee theft incidents where the employee was fired for cause. Since these were Union employees, the level of proof required was significant. Over the last sixty years there has been a lot of research done that consistently shows that given the opportunity about 10 to 15 % of employees will steal. Hiring a new employee is somewhat of a crap-shoot, since it's very difficult to tell what their personal moral/ethical standards are. Job interviews and reference checking will not answer that question. Just look at how many government/military personnel with top secret clearances are caught committing felonies.

I've had several retail clients taken advantage of by less than truthful merchant service reps. The problem is that this industry has very little in the way of regulatory scrutiny, so that sometimes it looks like the "Wild Wild West". There are a number of reputable merchant service firms that don't charge sign up fees, cancellation fees on a month to month agreement (no long term contract). So it's buyer beware.

My fees are above average, but I won't process payroll for less than $60 a month. For a biweekly payroll with 6 or 7 employees, I charge $ 90 per month.

FROM PC MAGAZINE Keep Poodle At Bay With Basic Internet Safety Oct 15, 2014 2:47 PM EST By Fahmida Y. Rashid Researchers have uncovered another serious vulnerability in Secure Sockets Layer (SSL) which affects how our information and communications are secured online. The good news is you can take specific steps to block attacks exploiting this flaw. . . . . . Why Do We Still Have SSL 3.0? Most modern servers and applications use TLS 1.1 or 1.2, but SSL 3.0 is still widely used in order to support legacy applications and systems. Internet Explorer 6 is one good example. While IE 6 is not as visible as it used to be, it hung around for quite a long time, so quite a number of servers and applications were built to support SSL 3.0 along with the more secure TLS. Netcraft estimated nearly 97 percent of SSL Web servers are likely to be vulnerable. "You could pretty much kill it in most places today," security researcher Troy Hunt wrote, but that is only part of the problem as there are clients out there which may depend on the ability to fall back to SSL 3.0. We don't know which ones they are, making companies less willing to just pull the plug. For example, there were Twitter reports that MetroTwit, a popular Twitter client for Windows, relied on SSL 3.0 and stopped working after Twitter disabled SSL 3.0 support Tuesday evening (MetroTwit has released a hotfix, by the way, so you should update your client). "It's the uncertainty that keeps these early generation technologies alive," said Hunt. Fix the Browser Problem Use a modern, standards compliant Web browser. Mozilla will disable SSL 3.0 by default in the next version of Firefox, expected Nov. 25, and Google is scrubbing it from Chrome. Safari auto-enables SSL, but Apple has yet to weigh in on its plans for the browser. Microsoft posted an advisory with instructions on disabling SSL 3.0 from Windows desktops and servers. "No need to hate on Microsoft, as Internet Explorer 10 or 11 will do," said Garve Hays, a solutions architect with NetIQ. You can manually turn off SSL 3.0 in IE by un-checking the SSL 3.0 box under the Advanced tabs in the Internet Options menu. Firefox users should go to about.config on the browser, and change the value for security.tls.version.min to 1. They can also download a Mozilla add-on to disable SSL 3.0. Chrome users who want to disable SSL 3.0 can add the command line flag --ssl-version-min=tls1 to the browser. Safari users will have to wait for an update, whenever it comes. Staying off Safari temporarily will reduce the likelihood of a Poodle attack

I've gone to several of their presentations in the past and Drake is where I would go if ATX falls on its face this year. There is no need to buy both of them. If I had to switch in February, I think it would go fairly well. I just prefer to stay with ATX, as long as things don't get any worse, since I've used ATX for over 15 years.

In an article I read some months ago the official error rate on VITA prepared returns was close to 50 %.

I would prefer that it stays the way it is now. I don't want to have to check 4 or 5 different categories

First you need a supportable FMV that would hold up under audit. I don't see how you will get there without a business appraisal, might cost $ 6,000 to $ 10,000. One you have a supportable FMV, then you can strategize.

I haven't used any Intuit programs in a long time, it's a personal preference. I'm just curious why you feel so strongly ?

Three options 1. Endorse the check as the corporation and deposit it in the personal account as a third party check. 2. Cash the check at the bank the check is drawn on. 3. Contact the insurer, explain the situation and request a check be issued to the individual

FROM ACCOUNTING TODAY The Internal Revenue Service is making changes in W-2 and 1099 forms and reporting requirements, starting next year. W-2 Form Changes Returned Wage Reports from the Social Security Administration Effective January 2015, the Social Security Administration will return Form W-2 electronic and paper wage reports under the following conditions : • Medicare wages and tips are less than the sum of social security wages and social security tips, • Social Security tax is greater than zero; Social Security wages and social security tips are equal to zero, and • Medicare tax is greater than zero; Medicare wages and tips are equal to zero. In addition, Forms W-2 and W-2c electronic and paper wage reports for household employers will be returned under the following conditions: • The sum of Social Security wages and Social Security tips is less than the minimum yearly earnings subject to Social Security and Medicare tax withholding for a household employee, and • The Medicare wages and tips are less than the minimum yearly earnings subject to Social Security and Medicare tax withholding for a household employee. If the above conditions occur in an electronic wage report, the SSA will notify the submitter by email or postal mail to correct the report and resubmit it to the SSA. If the above conditions occur in a paper wage report, the SSA will notify the employer by email or postal mail to correct the report and resubmit it to the SSA. Third-Party Sick Pay Recap Reporting The IRS expects to change the third-party sick pay recap reporting and filing requirements for wages paid in 2014. Information about this change will be included in the 2014 Publication 15-A. 1099 and Related Form Changes 1098: Mortgage Insurance Premiums Mortgage insurance premiums paid or accrued after Dec. 31, 2013, are no longer eligible to be treated as interest paid by the payer/borrower. Box 4 on Form 1098, formerly used for reporting these premiums paid or accrued, has been reconfigured for providing other information. 1098-C: Motor Vehicle Odometer Mileage Entry Donators of motor vehicles must enter the odometer reading of the motor vehicle in the new box 2a. 1099-B: New Reporting Requirements Brokers are required to report the adjusted basis of certain debt instruments upon a sale of the debt instrument. In addition, brokers are required to report the adjusted basis of certain securities futures contracts and options upon a sale or closing transaction as well as the gross proceeds from the sale or closing transaction. Brokers also must report whether any gain or loss from these transactions is short-term, long-term or ordinary. Furthermore, there are reporting requirements for a transfer of a debt instrument, an option or a securities futures contract to another broker and for an organizational action that affects the basis of a debt instrument, an option, or a securities futures contract. Additional changes to this form include: • The form has been redesigned to conform to the box numbers on Form 8949. A new box has been added at the top center of the form to enter a code that will assist the recipient in reporting the transaction on Form 8949 and/or Schedule D. • Additional State Copies: Copy 1 (For Payer State) and Copy 2 (For Recipient State) were added for 2014. • Boxes 14 through 16 (state boxes) allow for a second data entry. 1099-INT Boxes 10 and 11 were added to accommodate the new reporting requirements for a debt instrument that is a covered security and that is acquired by a taxpayer with market discount, bond premium or acquisition premium. 1099-K • Box 1b, Card Not Present transactions: Box 1b was added to the form to be used to enter the gross amount of total reportable payment card/third party network transactions for the calendar year where the card was not present at the time of the transaction or the card number was keyed into the terminal, such as in the case of online, phone, or catalogue sales. Reporting in box 1b is optional for 2014. • Second TIN notification box: The 2nd TIN notification box was added to Copies A and C. 1099-MISC Box 11, Foreign tax paid, and Box 12, Foreign country or U.S. possession, were deleted. This information is now reported on Form 8966, Foreign Asset Tax Compliance Act Report. 1099-OID Boxes 5 and 6 headings changed from Foreign tax paid and Foreign country or U.S. possession to Market discount and Acquisition premium respectively. Boxes 5 and 6 are now used for the new reporting requirements for a debt instrument that is a covered security and that is acquired by a taxpayer with market discount, bond premium, or acquisition premium. 1099-R: New Distribution Code Use Distribution Code K to report distributions of IRA assets not having a readily available fair market value (FMV). Important Dates – 2014 W-2 and 1099 Feb. 2, 2015 – due date to mail employee copies for W-2 & 1099 March 2, 2015 – due date to send paper format of 1099 Federal (IRS) filing March 2, 2015 – due date to send paper format of W-2 Federal (SSA) filing or March 31, 2015 – due date to send e-file format of W-2 and 1099 Federal (SSA/IRS) filing

Ask your new client to call the state CPA board.

At the end of this week,Microsoft will stop licensing Windows 7 to Computer makers. If you need or want another Windows 7 computer, now is the time to order one..

I copied this from an ATX email I received yesterday: RENEWAL REMINDER: Software is shipping next month-Renew before November 14th-and you won't experience a break in your product support. Call 800-495-4626 to renew I don't remember ATX saying in previous years ???

FROM TAX PRO TODAY inShare October 28, 2014 By Daniel Hood Intuit has enhanced its program for tax professionals, adding new benefits and opening it to enrolled agents. The online program, called Personal Pro, connects tax pros with potential individual clients and small-business owners who need a tax return prepared. Previously known as CPA Select, it has been refreshed and is now available for enrolled agents. The average tax pro can get as many as 40-50 new clients through the program, according to Intuit, and they can use any tax prep software. Once they’ve prepared a return, they create an invoice and upload the finished tax docs. Intuit handles the billing, and after the client has paid and approved the return, the tax pro files the return. Preparers receive 75 percent of the gross revenue, with Intuit issuing payments for completed clients on a monthly basis I don't think I could prepare returns for clients that I hadn't met face to face

Doesn't there have to be at least a down payment in 2014 ? Plus you don't say what kind of entity your client is, an accrual 1040 ???

Also, there are several similar competitors including one from amazon, whose fees are a bit cheaper. I have a concession stand client who uses Square and it seems to work fine,