The IRS recently issued a news release (IR-2024-65) warning that only qualified medical expenses are eligible for deductions or reimbursements from tax-advantaged accounts or arrangements. Personal expenses for “general health and wellness” aren’t. The news release specifically addresses health Flexible Spending Accounts, Health Savings Accounts, Health Reimbursement Arrangements and Medical Savings Accounts. The tax agency is concerned about “aggressive marketing” from companies claiming that a doctor’s note can “convert” purchases of nonmedical food, wellness or exercise products or service ..read more

A recent study found that background checks on job candidates aren’t always accurate, but that doesn’t mean employers should give up on them. Comprehensive and legally compliant background checks, properly conducted by either your organization or a trusted third party, can still reveal noteworthy information about job applicants. Examples include resumé inaccuracies, financial difficulties, and criminal charges or convictions. While conducting background checks, be sure to make legal compliance your highest priority. Particularly germane is the Fair Credit Reporting Act. Work with a qualified ..read more

Not only is April 15 the deadline to file a 2023 income tax return and pay any taxes due, it’s also the deadline to file a gift tax return. If you made substantial gifts of wealth to family members in 2023, you may have to file a gift tax return. It’s due by April 15 of the year after you make the gift, so the deadline for 2023 gifts is coming up soon. But you can extend the deadline to October 15 by filing for an extension. When a return is required Generally, a federal gift tax return (Form 709) is required if you make gifts to or for someone during the year that exceed the annual gift ..read more

With the rising cost of college, many families are in search of scholarships to help pay the bills. If your child is awarded a scholarship, you may wonder about how it could affect your family’s taxes. Good news: Scholarships (and fellowships) are generally tax-free for students at elementary, middle and high schools, as well as those attending college, graduate school or an accredited vocational school. It doesn’t matter if the scholarship makes a direct payment to the individual or reduces tuition. Requirements for tax-free treatment Despite this generally favorable treatment, scholarships a ..read more

Asset misappropriation schemes make up more than half of all occupational fraud schemes, according to the Association of Certified Fraud Examiners. It’s a broad category that includes everything from skimming cash to stealing inventory to paying “ghost” employees. One hotspot for asset misappropriation is the accounts receivables department, where dishonest staffers could potentially divert customer payments for their own use. If you don’t have strong internal controls for receivables, what are you waiting for? Lapping leads The most common form of receivables fraud is lapping, where perp ..read more

Smaller businesses may struggle with the financial and administrative burdens of sponsoring their own retirement plans. Thanks to the Setting Every Community Up for Retirement Enhancement Act of 2019, however, a relatively new solution is available: pooled employer plans (PEPs). PEPs are a variation on an existing retirement plan model, multiple employer plans (MEPs), which are qualified plans maintained by two or more employers. But properly designed PEPs avoid some of the restrictive rules that can negatively impact MEPs. PEPs are available from “pooled plan providers,” which include financi ..read more

If you’re concerned about your 2023 tax bill, there may still be time to reduce it. Here are four quick strategies that may help you trim your taxes before year end. 1. Accelerate deductions and/or defer income. Certain tax deductions are claimed for the year of payment, such as the mortgage interest deduction. So, if you make your January 2024 payment in December, you can deduct the interest portion on your 2023 tax return (assuming you itemize). Pushing income into the new year also will reduce your taxable income. If you’re expecting a bonus at work, for example, and you don’t want the ..read more

If you’re like most parents of young children, you’ve put a lot of thought into raising your kids. But have you considered what would happen to them if you (and your spouse if you’re married) should suddenly die? You can avoid a worst-case scenario by appointing a guardian in your will. This can be done easily enough by having your attorney add a clause to your current will or, if warranted, through drafting a new will. Be aware that there’s no definitive “right” or “wrong” choice for a guardian. Every family’s situation is different. What happens if you don’t name a guardian for minor childre ..read more

Restricted stock awards are a popular way for companies to offer equity-oriented executive compensation. Some businesses offer them instead of stock option awards. The reason: Options can lose most or all of their value if the price of the underlying stock takes a dive. But with restricted stock, if the stock price goes down, your company can issue you additional restricted shares to make up the difference. Restricted stock basics In a typical restricted stock deal, you receive company stock subject to one or more restrictions. The most common restriction is that you must continue working for ..read more

If you’re planning to start a business or thinking about changing your business entity, you need to determine what will work best for you. Should you operate as a C corporation or a pass-through entity such as a sole-proprietorship, partnership, limited liability company (LLC) or S corporation? There are many issues to consider. Currently, the corporate federal income tax is imposed at a flat 21% rate, while individual federal income tax rates currently begin at 10% and go up to 37%. The difference in rates can be alleviated by the qualified business income (QBI) deduction that’s ava ..read more