Key Tax Developments, Quarter 2

Once again, the past quarter has brought many financial changes that affect both individuals, families, and businesses. Here are some of the key developments over the past 3 months:

• Employers have until September 28, 2016 to file the necessary forms to claim to claim the retroactively revived work opportunity tax credit (WOTC)the credit for certain employees hired before August 31, 2016..

• The IRS has slightly increased percentages used for the ACA Premium Credit and the individual mandate to adjust for inflation.

• Taxpayers needing to pay the IRS in cash can now pay up to $1,000 per day at 7-Eleven stores.  There is a $3.99 fee per payment.

• Despite concerns from lawmakers and business owners, the IRS proposed Code Sec 385 regulations about debt versus equity for related party corporate transactions.  However, these controversial regulations may also affect many routine financial transactions like cash-pooling arrangements and common subchapter C transactions of multinational corporations.

• A District Court ruled that the ACA’s reimbursements to insurers were in violation of the Constitution but stayed its injunction pending appeals.

• Social Security is forecasting a wage base increase from $118,500 to $126,000 in 2017.

• The Tax Court held that a clothing salesman for a major designer who was required to wear the designer’s apparel while working could not deduct the cost of such clothing because it was clearly suitable for regular wear.

If you have questions about these tax changes, contact Burkett Burkett & Burkett, Certified Public Accountants, P.A.. We can help you see how these changes may affect you or your business. For additional information regarding these tax developments, read the full article here.