A couple of weeks ago the IRS released the final regulations for the additional 0.9% Medicare Tax that was imposed under the Affordable Care Act. These regulations are effective beginning with the 2013 tax year.
Under the new regulations, employers are required to withhold an additional 0.9% in Medicare Tax on income over $200,000.00 for single taxpayers, $250,000.00 for married filing joint, or $125,000.00 for married filing separate taxpayers.
This additional withholding applies to wages, railroad retirement compensation and self-employment.
Those taxpayers who have more than one source of household income need to be aware of what their year to date income is. If their combined wages exceed the threshold they need to notify their employer and have additional Medicare Taxes withheld. An alternative to having the employer withhold the additional tax would be to make estimated tax payments to the IRS on their own.
With only 3 weeks left in 2013, now is the time to make sure your withholdings are in order to avoid being hit with large payments or penalties come tax filing time.
Veterans Day has always been special to me. Our family has a long history of men who have served. My Dad retired from the Army and ultimately gave his life as he died from Agent Orange related Cancer. Both of my son-in-laws have/are serving. Both did tours in Iraq, and one also did a tour in Afghanistan.
Families of our military serve and sacrifice as well, so I’d like to say a special thank you to them.
In honor of our Veterans, many restaurants are offering free meals or appetizers Monday, November 11th. Here are a few and a link to find even more:
Applebee’s – Free meal.
Chili’s – Free meal
Denny’s – Free all you can eat pancakes from 6am – 2pm
Golden Corral – Free meal
Hooters – Free meal up to $10.99 in value with any drink purchase
Little Caesars – Free Crazy Bread
Lone Star Steakhouse – Buy one, get one free entree
On The Border – Free entree
Outback Steakhouse – Free Bloomin Onion and non-alcoholic beverage
Red Lobster – Free Appetizer
For more information or to find other restaurants honoring our Veterans this year click HERE
Early voting for the November 5th election began on Monday, October 21st. While there are nine amendments up for consideration in Texas this time, the main thing I see in the media and news feeds is the new requirement for photo id’s in order to vote.
According to the National Conference of State Legislatures, 34 States have some form of Voter ID laws, with 20 of those States requiring a photo ID. Yet it seems that everyone is focused on Texas’ requirement. Some of the articles and blog posts I have seen border on being comical. They are so riddled with false information and void of any facts.
Here are a few facts from www.votetexas.gov .
A. Election officials will review the ID and if a name is “substantially similar” to the name on their list of registered voters, you will still be able to vote, but you will also have to submit an affidavit stating that you are the same person on the list of registered voters.
A. A voter’s name is considered substantially similar if one or more of the following circumstances applies:
1. The name on the ID is slightly different from one or more of the name fields on the official list of registered voters.
2. The name on the voter’s ID or on list of registered voters is a customary variation of the voter’s formal name. For example, Bill for William, or Beto for Alberto.
3. The voter’s name contains an initial, middle name, or former name that is either not on the official list of registered voters or on the voter’s ID.
4. A first name, middle name, former name or initial of the voter’s name occupies a different field on the presented ID document than it does on the list of registered voters.
In considering whether a name is substantially similar, election officials will also look at whether information on the presented ID matches elements of the voter’s information on the official list of registered voters such as the voter’s residence address or date of birth.
A. The new requirement makes no determination on voter address matching criteria; therefore, there is no address matching requirement.
Qualified voters who do not have an approved photo ID can obtain one free at their local DPS office. For more information visit http://www.txdps.state.tx.us/DriverLicense/electionID.htm.
There are also mobile stations that will be set up in all of the major counties that have a high minority and low income populations, such as Harris County, Bexar County, Tarrant County and El Paso County. To find a list of those visit http://www.votetexas.gov/election-identification-certificate-mobile-stations .
As a business owner, making sure you are in compliance with all of the mandates of Obamacare is challenging, to say the least. The requirements are not always clear. Take the basic mandate that all employers with more than 50 full time employees must provide affordable insurance coverage that meets the minimum standards set by the ACA (Affordable Care Act). If you have more than 50 full time employees (those working more than 30 hours a week) you have to comply or face a tax of $2000.00 per full-time employee over 30 employees. If you have less than 50 full time employees then you are not required to provide coverage. Sounds pretty simple and straight forward doesn’t it? Unfortunately, we are talking about the government here, so nothing is ever simple or straight forward.
Many businesses, in an effort to avoid the high costs of the coverage mandate, have begun reclassifying employees from full-time to part-time and reducing their hours to below the 30 hours per week. While this may seem like the best solution, be aware, it’s not as simple as it seems.
The following is the example provided in the Congressional Research Service report:
“The hours worked by part-time employees (i.e., those working less than 30 hours per week) are included in the calculation of a large employer, on a monthly basis. This is done by taking their total number of monthly hours worked divided by 120.
For example, a firm has 35 full-time employees (30+ hours). In addition, the firm has 20 part-time employees who all work 24 hours per week (96 hours per month). These part-time employees’ hours would be treated as equivalent to 16 full-time employees, based on the
20 employees x 96 hours / 120 = 1920 / 120 = 16
Thus, in this example, the firm would be considered a “large employer,” based on a total full-time equivalent count of 51—that is, 35 full-time employees plus 16 full-time equivalents based on part-time hours. “
Even though this firm only has 35 full-time employees, it’s part time employees count towards the full-time equivalent, making this company one that must either comply with the mandates of the ACA or face tax penalties. The good news for employers is implementation has been moved to January 1, 2015 for businesses. This allows business owners time to plan. The best place to start is to seek the advice of an accountant that is familiar with ACA laws and regulations.
As everyone is aware, the implementation of Obama Care, aka the Affordable Care Act, is quickly approaching.
Beginning January 1, 2014, individuals and employees of small businesses will have access to coverage through the new private health insurance market. Open enrollment for health insurance coverage through the Marketplace begins October 1, 2013.
No matter what your opinion of Obama Care is, if you are a small business owner with even 1 employee, here’s something you need to know: Section 1512 of the Affordable Care Act creates a new Fair Labor Standards Act (FLSA) section 18B requiring a notice to employees of coverage options available through the Marketplace.
So what does this mean? Most employers with less than 50 employees tend to think they do not have to do anything since they are not required to provide insurance under Obama Care. This is not entirely true. All employers, rather they have 1 or 1000 employees are required to give every employee a New Health Insurance Marketplace Coverage Options and Your Health Coverage letter prior to October 1, 2014. Failure to issue this letter could result in $100.00 per day, per employee fine.
For more information about this requirement click HERE.
To download a model notice for Employers that provide insurance click HERE.
To download a model notice for Employers that do NOT provide insurance click HERE
I love to cook, experiment, try new foods, but when it comes to baking I just don’t do it. When my kids were younger I did make cookies and the occasional cake, but that was about the extent of it. A few years ago I decided that I really did need to learn to make Banana Bread and Pumpkin Bread. These are my favorite two sweets. I can always call my Mommy and talk her into making them for me, but lets face it, Mommy is in her mid 70′s. And yes, when I’m trying to talk her into making me something like these breads I do revert to a childhood state and call her Mommy.
Over the years I have attempted to make both breads. They never turned out like my mothers. Actually, they didn’t turn out like anything that you’d really want to eat. But yesterday I was determined. I had all these bananas that were going to have to be tossed if I didn’t do something with them, and I hate to waste. I had my Mothers recipe, but I already knew I couldn’t get that to turn out right. So I started looking and took some ideas from a few recipes and……….viola…….. I actually impressed myself. This is so easy to put together.
2 cups mashed, very ripe, bananas (I had 7 bananas)
2 cups flour
1 tsp baking soda
1/4 tsp salt
1/4 tsp nutmeg
1/4 tsp cinnamon
3/4 cup brown sugar
1 stick (1/2 cup) butter
1/2 cup chopped nuts (pecans or walnuts) optional
Cream the brown sugar and butter, mix in the eggs then the bananas. Sift all of the dry ingredients together. Ad the wet ingredients to the dry ingredients and mix just until combined. Spray or oil a loaf pan. Pour batter in pan and bake at 350 for 60-65 minutes, or until toothpick inserted into center comes out clean.
Now if I can just get the pumpkin bread down.
It’s hard to believe that 2013 is half over. Now is the time to start looking at your payroll tax withholdings and make sure you’re having enough withheld so you don’t end up owing a big chunk at the end of the year.
Here is a neat calculator the IRS provides to help you decide if you need to make any adjustments to your withholdings. You will need your most recent tax return and your most recent pay check stub to get the most accurate results. Click HERE to go to the calculator. Or visit http://apps.irs.gov/app/withholdingcalculator/
There are also two new Medicare surtaxes that went into effect this year in compliance with new Obama Care mandates. These changes affect those with incomes in excess of $200,000.00 ($250,000.00 if filing joint). So if you’re in this bracket, you need to make sure you’re having enough withheld.
3.8% Medicare Tax on Net Investment Income—Taxpayers who earn more than $200,000.00 ($250,000.00 if married filing jointly) face an additional 3.8% Medicare tax on the lesser of: their income in excess of $200/250,000.00, or their net investment income (interest, dividends, royalties, rents, etc.). For more information on this surtax click HERE or visit http://www.irs.gov/uac/Newsroom/Net-Investment-Income-Tax-FAQs
The second change to Medicare tax is a .9% additional withholding on earned income over $200,000.00 ($250,000.00 if filing joint). Earned income includes wages, self-employment income, commissions, bonuses and tips, but excludes investment income. Your employer is required to withhold the additional tax if your income exceeds the 200,000.00 mark, however, they probably will not be aware of addition income you may have so it’s up to you to notify them that the additional amount needs to be withheld. To find out more about this tax click HERE or visit http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Questions-and-Answers-for-the-Additional-Medicare-Tax.
Stay on top of your withholdings. While no one enjoys having all this money taken out of their paychecks, we like it even less when we have to fork over a big check come filing time.