Here’s a quick review of some of the rules you can expect to encounter when you get ready to prepare your 2016 federal income tax return. Income tax rates. For 2016, ordinary federal income tax rates range from 10% to 35% unless your taxable income exceeds $415,050 when you’re single or $466,950 if you’re married filing jointly. The rate on income above those amounts is 39.6%.
The social security coverage threshold for domestic employees, including nannies, will remain at $2,000 for 2017, the same as the 2016 threshold. If your household workers earn less than $2,000, you do not have to pay social security or Medicare taxes on wages paid to those employees. When you pay your household employees more than the threshold, you’re required to pay social security tax of 6.2% and Medicare tax of 1.45%. The $2,000 threshold applies separately
Losses can be hard to take – so if you think your S corporation will show a loss for 2016, now’s the time to plan to make sure you’ll get the full tax benefit. The problem. The amount of the business loss you can deduct on your individual income tax return is limited to your basis in your S corporation stock and certain corporate debt. This is true even if the loss reported to you on
For 2017, the wage base for withholding social security tax from wages has increased to $127,200, up from $118,500 in 2016. The “wage base” is the amount of wages on which employers and employees must pay the 6.2% social security tax. The increased wage base means an additional $8,700 of your income is taxed. The wage base does not affect the 1.45% Medicare payroll tax. Medicare tax is assessed on all wages and net income from
December 15 – Due date for calendar-year corporations to pay the last installment of 2016 estimated income tax. December 31 – Deadline to complete 2016 tax-free gifts of up to $14,000 per recipient. December 31 – Deadline for paying expenses you want to be able to deduct on your 2016 income tax return.
An employee complains about discrimination or harassment, and you conduct an investigation. The employee is still unhappy and sues. Can you be forced to turn over all your notes from the investigation as part of the court case? The answer is not always clear – and it’s an important issue you should be aware of. As a general rule, any relevant documents that are created in the normal course of business are fair game to be
The federal government has begun a much more intensive program of auditing health care providers for violations of HIPAA, the federal law that protects patients’ privacy. For the first time, the government will be auditing not only health care providers but also related businesses to whom patients’ information might be disclosed – including third-party administrators, accountants, attorneys, consultants, clearinghouses, transcriptionists and pharmacy benefits managers. For this reason, it’s important for all providers to understand the relevant
Anthony Leness was an executive at a company called EventMonitor. His contract stated that he couldn’t disclose confidential information and that he would return all such information if he left the company. After six years, Leness was terminated. Shortly afterward, the company discovered that he had subscribed to an online data storage service and had uploaded a large number of the company’s files to the service, including confidential data. The company changed the status of his
Businesses can require their tipped employees to participate in “tip pools,” in which they contribute all their tips to a pot and then share them according to some formula. As a general rule, a tip pool can only include employees who regularly receive tips. So for instance, a restaurant can require all its waiters to share tips among themselves, but it can’t require them to share their tips with prep cooks and dishwashers. You should also
As more and more companies sell things online, especially to far-flung customers, it can be difficult to keep track of the ever-changing legal rules that apply. Here’s a look at just some of the issues on the horizon that online retailers should be aware of: Is your website accessible to the disabled? You might be surprised at the idea that the federal Americans With Disabilities Act applies to online stores, but the U.S. Department of Justice
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