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It's the change in the Repair vs. Capitalization Regulations that is causing this. 2013 and 2014 are the years to "reboot" our clients' depreciation schedules to bring them into compliance. I felt like it was for new purchases beginning after 31 December 2013, but it's for any item still on a depreciation schedule or that should be on a depreciation schedule or that was capitalized and should have been expensed or was expensed and should've been capitalized or that gets disposed of or.... I'm taking several classes and getting very worried about how much time this will take me this coming tax season (I did NONE of it last season, being a bit undereducated, and have NEVER prepared Form 3115) and how my clients will resent paying what this is worth when THEY didn't make the change but the regulations changed.

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As far as the cell phone and auto allowance is concerned, if these are paid under an "accountable plan" where the employee substantiates expenses to the employer where the substantiation equals at least the amount of the payments to the employee, these amounts paid are tax-free to the employee. If the substantiation is less the amount of the payments, only the amount of the payments unsubstantiated get included in wages.

I inherited a PR client - one employee, weekly. I kept the prior guy's fees of $95/month for PR & PR tax pmts, plus $75/qtr for Form 941 (mailed to client to sign and send in himself; I won't do e-file of 941's).

I knew you knew the difference, Jack, so I wasn't going to refer to your post. Sometimes when we are typing we don't always get what we mean down on the screen - but we knew what we meant!

Some information on the new Regs and form 3115 here: http://www.journalofaccountancy.com/Issues/2014/Feb/20137725.htm

You should recommend that they implement an 'accountable plan' for at least the mileage. This will save both the company and the sales rep taxes. It's hard to have a cellphone reimbursement in an accountable plan because most cellphone plans are flat rate, so the employee incurs no additional costs.

You are correct. That is what I meant, but typed a short version. Thank you for catching that Gail.

Any payment made to an employee in lieu of health insurance must be considered Box 1, 3 & 5 taxable income. The employee may deduct premiums he pays on Sch. A. These payments do NOT nor CANNOT be considered as healthcare insurance provided by the employer. Phone and car allowance must be treated the same, and any expenses the employee incurs above those amounts go on 2106.

Wages. Maybe someone really up on ACA (Jack, do you know?) can comment on whether it's better to have no health payments at all or to reimburse one out of several employees for health benefits. Will that count as a health plan but not a qualified health plan and incur penalties? Or, does none of that at all kick in until 50 employees? (So far, none of my small businesses have any employees. Still have more courses coming up in November, December, and January, though.)