713-203-6904 Houston, TX

Ten Days Till the Personal Tax Deadline

Busy night worked till 5 am up at 8:30 am

 

Three meetings in Westchase this afternoon.

 

Consulted with a BBQ start up who is doing everything the right way in his infant business.  He shared Group Me with me and I shared Gary Vaynerchuk with him.

 

 

Had a client from Venezuela who forgot her ITIN from 2008.  She was able to get it from the IRS by using the below phone number.

In order to retrieve a lost ITIN (that is Individual Taxpayer Identification Number), you will need to call the IRS ITIN Hotline at 1-800-908-9982. You can answer a series of questions to verify your identity and the IRS will provide you the number.

Keep in mind, if it has been several years since the number has been used, the IRS will deactivate the ITIN and require you to resubmit the Form W-7 and required documentation (original passport) to obtain a new ITIN.

Thanks to the https://getoutofdebt.org/ for the info.

Saturday is the Most Productive Day

By Brian Bleifeld CPA

LinkedIn

Hello everybody and welcome to the Bleifeld CPA Blog.  This is going to be an exciting place to share the adventure of running a CPA firm.  Along the way we will probably learn a thing or two.


Plan for the day:

Dee

  • Dee is catching up on some tax returns

Brian

  • Meetings with clients to discuss their tax returns
  • Consult with a new S Corp holder on initial documents
  • Back years of 941 for a client with two companies
  • Update tax options for overseas clients
  • Work on Financial Control package for my Gun Range client
  • Work on a Real Estate clients two years of returns

Research:

Researching OTR Trucking Per Diem

Below is a Video (not mine) which explains it pretty well.

Video

The IRS allows people who travel for business to deduct their meal expenses from their income. The Per Diem rate is set by the Department of Transportation. The current rate (as of October 1, 2015) is $63 per day in the Continental US and $68 per day while in Canada. You may have heard the amount of the deduction quoted as $50.40. That is because the IRS only allows you to deduct 80% of that rate. Non-CDL riders who are performing other duties (bookkeeping, dispatching, assisting loading, and unloading) may deduct a slightly lower rate of $57 per day, or, rather, 50% of $57 which comes out to $28.50.

Because of this change you will need to keep track of the different per diem days for 2015. You will use the old $59/day rate for January 1 through September 30, 2015 and the new rate for October 1 through December 31, 2015.

In order to qualify for these deductions, IRS publication 463 states that you are traveling from home if:

  1. Your duties require you to be away from the general area of your tax home substantially longer than an ordinary day’s work, AND
  2. You need to sleep or rest to meet the demands of your work while away from home.

It further states that taking a nap does not satisfy the requirement. However, “you do not need to be away from home for a whole day as long as your relief from duty is long enough to get necessary sleep or rest.”

What does this mean to a driver? If you are an over-the-road driver, the rule is simple. You get to claim the tax deduction for each day that you are away from your “tax home”. On the days that you depart and the days that you arrive at home, you must claim a partial day allowance. That is ¾ of the standard allowance.

Things become a little more complicated if you are a local driver. Are you gone from home long hours? Local and regional drivers are frequently away from their home much longer than an average eight-hour workday. Therefore, fulfilling the first part of the requirements is simple. Yet, notice the “AND” between the two requirements? This means that you must meet both conditions in order to claim the deduction.

Furthermore, IRS publication 463 states that you must have a “tax home”.  There are three tests to determine your tax home. In order to meet the requirements, you must satisfy two of the three following tests:

A. You perform part of your business in the area of your main home and use that home for lodging while doing business in the area.
B. You have living expenses at your main home that you duplicate because your business requires you to be away from that home.
C. You have not abandoned the area in which both your historical place of lodging and your claimed main home are located; you have a member or members of your family living at your main home; or you often use that home for lodging.

So what does this all mean? In a nutshell:

  1. You must be away from home for 24 hours.
  2. You must have a home from which to be away.
  3. If you meet requirements A and B, you can deduct $50.40 for each full day away from home as a driver and $28.50 as a non-CDL rider. You can deduct $37.80 per partial day as a driver and $21.38 as a non-CDL rider.

First post in the Bleifeld CPA Blog

By Brian Bleifeld CPA

LinkedIn

Hello everybody and welcome to the Bleifeld CPA Blog.  This is going to be an exciting place to share the adventure of running a CPA firm.  Along the way we will probably learn a thing or two.


 

Plan for the day:

Dee

  • Dee is in the Westchase office training a new client on how to use QuickBooks effectively.
  • Lunch Meeting with our Virgin Islands client and his wife http://www.steamboathousetx.com/
  • General accounting in the afternoon

Brian

  • Start the Bleifeld CPA Blog
  • Brian is going to form a new LLC for a start up trucking company
  • Research a 1095 issue for a client proposal
  • A tax return or two
  • Research doing business in Curaçao
  • Lunch Meeting with or Virgin Islands client and his wife Going to The Steamboat House
  • Help catch up two years of 941 for a new client

Research:

Topic Combined group reporting for 1095 compliance.

So a potential client has five related companies with various levels of ownership.  Some 100% some 50%.  None of these companies have enough employees to be forced to comply with Affordable Care Act (ACA) mandate for reporting as a large employer (over 50 employees) on their own but combined they are over the limit.  Question is with the varying levels of ownership does it create a reporting obligation for the group when each individual company would be exempt?

So the first test is if there are over 50 employees in the group and that answer is yes.  The next question is are these corporations part of a controlled group.

A “brother-sister” controlled group consists of two or more corporations, in which five or fewer common owners (a common owner must be an individual, trust, or estate) jointly own directly or indirectly a “controlling interest” of all corporations in the group, as well as have “effective control” of said corporations. Controlling interest generally means jointly owning 80 percent or more of the stock of all corporations in the group (but only if said common owners individually own stock in each corporation). Effective control generally means jointly owning more than 50 percent of the stock of all corporations in the group, but only to the extent that the individual stock ownership of each common owner is identical with respect to each corporation in the controlled group).

In this particular case two of the companies have the same 100% ownership and a combined 60 employees so those companies would be subject to the requirements.  The other related entities since they have different owners and not more than 50% ownership they would be exempt.  So the answer for 2015 would be the two 100% owned companies are subject to the reporting but not to the requirements of the ACA.

So for 2015 two of the companies are required to file under the reporting rules.

Treasury Fact Sheet

Topic Employment  and income taxes in Curaçao.

I went to Curacao in

Employment Taxes

Did some research on employment taxes in Curacao and here is what I discovered.

In Curaçao, the following social security taxes are levied:

  • Health care insurance (Basisverzekering ziektekosten or BVZ).
  • Old age pension (AOV) widow and orphan pension (AWW).
  • General insurance exceptional medical expenses (AVBZ).

BVZ – Health Insurance

In general, all residents are insured for the BVZ. There are a few exemptions, such as residents
who, at the time of the introduction of the BVZ (1 February 2013), were insured based on a private
health insurance plan for as long as that insurance plan continues. Persons who emigrate to Curaçao
will need to have a private health insurance plan and will not be subject to the BVZ.

With regard to employees

As of 1 January 2015, the BVZ premium is 13.6%, of which 9.3% must be paid by the employer and 4.3%
by the employee. The maximum premium income is ANG 150,000.

The employer also must pay 1.9% for the income risk related to sickness of the employee on wages up
to ANG 62,852.

With regard to non-employees

Residents with income other than from an employment pay 13.6%. However, persons from the age of 65
pay 6.5%. The maximum premium income is ANG 150,000.

AOV/AWW – Social Security

The commencement age for entitlement to the AOV increased, with effect from 1 March 2013, from 60
to 65 years. A grandfathering clause applies to residents who were 57, 58, or 59 years old at the
time of the increase.

The premium rate is 16%, In case of income from employment, the employer must pay 9.5% and the
employee must pay 6.5%. Additionally, anyone who enjoys an income of more than ANG 100,000 must pay
a premium of 1% on the excess income. In case of wage income, this is borne by the employee.

AVBZ – Medicare

The AVBZ, or general insurance exceptional medical expenses, is a national social insurance from
which the entire population of Curaçao can derive rights. The AVBZ guarantees, among other
benefits, medical care to persons suffering from a chronic disease or a mental or physical
disorder. The premium charged to create the necessary funds amounts to, in general, 2% of taxable
income, with a premium cap of ANG 456,642 (2015). The employer’s share amounts to 0.5% of the
employee’s income.

Old-age pensioners are taxed at a rate of 1.5%.

Income Taxes

Netherlands Antilles Bonaire and Curacao personal Income Tax

Individual income tax rates in the Netherlands Antilles are progressive up to 38%. A surtax of 25% or 30% also applies.

All amount in Dutch Guilder (ANG) which is currently trading at .53 USD

Taxable income (ANG)      Tax on lowest amount (ANG)      Tax Rate on excess
up to 25,514                                –                                                               10%
25,514 to 38,271                       2,551.40                                                    16%
38,271 to 53,154                       4,592.50                                                     21%
53,154 to 79,730                       7,717.90                                                     27%
79,730 to 112,685                   14,893.40                                                    38%

The tax is increased by an island surcharge which for Curaçao is 30% and for all other islands 25%. The social security contribution rate is 9.35%.

Certain types of income may benefit from special rates of 5% (savings income) or 15% (substantial interest income).

Employment income is subject to wage tax and social security contributions (levied by withholding). Several deductions and allowances may be available.