jklcpa

Terry, the way I understand it, for companies having less than 2 employees, continue to treat it as it was in 2013. After the guidance was issued in 2015-17, health insurance paid or reimbursed for the more-than-2% shareholder is to be treated as wages subject to FWT, reported in box 1 only, NOT subject to FICA or Medicare in boxes 3 or 5. It is also allowed as a deduction on page 1 of the 1040 as SEHI. This last topic discussed that, especially toward the end, and has a link to the 2015-17. At least that is how I think it is now. Nothing like working with shifting sands underfoot, eh? I agree with NECPA about the officer's life insurance. Not deductible.

I think you need to file CO based on this, from the instruction booklet: Filing Information Who Must File This Tax Return Each year you must evaluate if you should file a Colorado income tax return. Generally, you must file this return if you were: A full-year resident of Colorado; or A part-year Colorado resident who receives taxable income while residing here; or Not a resident of Colorado, but receives income from sources within Colorado; and Are required to file a federal income tax return with the IRS for this year; or Will have a Colorado income tax liability for this year.

Margaret, maybe you should start a separate topic in general chat regarding only the COBRA as it relates to the SEHI deduction. Some of the people aren't visiting the ACA forum, and since this portion of your question isn't directly related to the ACA, you might get more input from general chat than just from me.

Might this also fall under the dollar limit for safe harbor for small taxpayers with buildings? Do the total repairs exceed the lesser of $10K or 2% of unadjusted basis of the building?

Margaret, I did a little quick reading (and googling). Sec 162(l)(2 )(B ), regarding the health insurance says: (B ) Other coverage Paragraph (1) shall not apply to any taxpayer for any calendar month for which the taxpayer is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of, or any dependent, or individual described in subparagraph (D) of paragraph (1) with respect to, the taxpayer. The preceding sentence shall be applied separately with respect to— (i) plans which include coverage for qualified long-term care services (as defined in section 7702B (c )) or are qualified long-term care insurance contracts (as defined in section 7702B (B )), and (ii) plans which do not include such coverage and are not such contracts. The word "subsidized" is where everyone hangs up on the issue. I've read posts where both sides of the issue are taken, depending on how one interprets the word. Here's a site with some lawyers arguing over the same issue back in 2010 (lawyers dot com discussion forum). You should take a look at the whole thread but in particular the 5th post down where the posts states that the IRS national office counsel, in advice to a field attorney, addressed the issue by stating: Note that it disallows as a self-employed health insurance deduction (a § 162(l) deduction) any premiums paid on an insurance plan subsidized by an employer. The term subsidized means that the employer pays some part of the premium cost. The normal COBRA plan requires that the employee pay 100% of the cost of the insurance plus a 2% handling fee. It is therefore not subsidized by the employer, and thus the premiums paid for that insurance is eligible for the § 162(l) deduction. This is something that IRS national office counsel noted in advice to a field attorney: "With respect to COBRA continuation coverage, we understand that in the typical situation a group health plan requires premium payments of 102 percent of the applicable premium, as permitted by section 4980B(f)(2)© of the Code. Therefore, an individual receiving COBRA continuation coverage from such a plan would not be receiving subsidized coverage within the meaning of section 162(l)." IRS FSA 1995 WL 1918547. I still don't have a good feeling about taking the deduction. Could it truly be argued that it is established under the name of the business since it is through another employer's group, whether it is subsidized or not? >This topic from 2012 on this forum also has opinions on the "subsidized" plan question. See Jainen's post #6 which is the same as some other opinions I found in my searches where he says that all employer group plans are subsidized. Anyway, that's some of what I found. I don't know if any of that is helpful.

The number of views can come from anyone searching the web that clicks on the topic, not just from members here. With everything you wrote in your first post, I wasn't sure what exactly your question was. The family size is definitely '2' unless you find that your client fails one of the dependency tests for the student, she is a dependent and she earned $6500. Those earnings take her over the threshold for being required to file a return, so her income must be included in MAGI. It looks like your client had coverage for 10 months. Does she qualify for the short coverage gap for the other two to at least avoid the penalty for those months? COBRA generally counts as having the availability of a plan outside the marketplace, as long as the policy meets minimum essential coverage. Where exactly is your question on the COBRA? I'll try to help if I'm able. ETA - if your question on the COBRA is whether it can be included for purposes of the SEHI, my reaction is that it's not. It is a continuation of a policy established under another employer's group plan, not a plan in the name of your self-employed client. You'd have to take the position that the policy is established in the name of your client's business in order to include it for purposes of calculating the SEHI.

I got that, but I'm still old school here and would print a complete set of books. When entering the transactions after the fact, it's easy to enter the wrong date, especially if working in early Jan or Feb. Yeah the QB will give the warnings about the dates, but it's still easy to do when entering fast, or entering a transaction with the current day's date. I've done both on occassion, hit the enter key to fast and then had to go back to fix. At least I catch those at the time and know the transaction I had just entered.

Perhaps those wins had something to do with GA state law? Does GA have a provision that considers a separated couple to be considered unmarried after some length of time? As an alternative to that, I've had clients of long term separations that both still considered themselves married to each other, got along great as long as they didn't actually physically live in the same house, still called each other as "my husband" or "my wife", there was never a separation or division of assets, and didn't want a divorce.

I'm with rfassett and michaelsmars. I print the comparative BS and IS, TB, AJES, RJEs, and GL. I always check that the retained earnings still ties in.

It can be a qualifying relative for HOH.

That isn't working for me; I'm getting a message that the search must have 4 letters. Maybe that option went away with one of the forum upgrades we've had since then.

Right, HOH was never an option for this client. There are no children. I brought it up only because JB mentioned the length of separation and wanted to be clear that that was not a consideration in this case. The only consideration is the marital status at 12/31/14, by decree of divorce or separate maintenance.

The 1250 recapture should have been reported in the year of sale, and the GP% and installment gain to be reported over time relates only to the cap gain portion of the sale. The installment portion of the cap gain and the interest income received are reported each year until the note is collected in full.

I remember the story of this client too. The only status she can properly file is MFS and must itemize. At least she is now living apart now.

Maybe these will help some, defines what an eligible plan for PA purposes is: from the PICPA: http://www.picpa.org/ask/public/View.aspx?id=251&ReturnUrl=Search.aspx%3fi%3d9%26k%3d%26c%3d1 from the PA Dept of Revenue's site, the PA PIT Guide, see chapter 7, section XVI starting on page 92 (has the same criteria as the PICPA page): http://www.revenue.pa.gov/FormsandPublications/PAPersonalIncomeTaxGuide/Documents/pitguide_chapter_07.pdf

Please see pages 11 & 12 of the PA-40 instructions. The first is about how PA taxes pensions and if it is from an eligible plan, and the second page specifically addresses those early distributions that are taxable, and the requirements for when those are not taxable.

I agree with Rita. The only instance when the length of time living apart comes into play is if the person meets the definition of "unmarried" AND wants to file as HOH.

If they can claim this person as a qualifying relative, they will owe the penalty for the 29 year old without insurance coverage unless they meet one of the exceptions.

I have had clients call this week to make appts a couple of weeks out and saying they still don't have the 1099s from brokers!

Uh oh, two math teachers giving us lessons....

I'd be very careful about providing any information about this for the reasons already mentioned, plus there can be a wide range in a valuation for this kind of service business depending on its size. As Lion said, I'd point the roofer back to looking for that information through trade organizations that he can provide directly to the "requester" without involving you. Here's an interesting article about why these types of businesses have such low values, and at the end talks about how a roofer could increase the value of its business. You'll see from this that a roofer with a couple of trucks with signs on them and operating out of a small office will have a vastly different valuation than a larger one that has multiple levels of management, a sales team, a large number of roofers employed, etc. It is from roofingcontractor dot com. http://www.roofingcontractor.com/articles/84818-how-much-is-your-business-worth

ha, Pacun, I saw what you did there. It was clear to me, but I only included that part about the qualifying child because Yardley's snippet seemed to be only a portion of the criteria for that, and he didn't have any rules for being a qualifying relative.

No, your client can't take either son as a dependent. For being a qualifying child, they each fail the age test. For being a qualifying relative, they each fail the gross income test.

I see that but it could mislead some readers because of the way it was written. Your first sentence sounded like the law, and it was only made correct and complete by taking the example into consideration as law also.

I don't know the answer about entering zero. Do you want to do that to document that you've considered the income and reported "something"? I pulled out an old Master Tax Guide and was then reading Reg 1.183-1 through 1.183-4. Maybe the answer is in there somewhere. Are there any costs that might be moved out of COGS as more indirect costs, or any that should be considered withdrawn for personal use, or is this person really not able to get the prices she dreamed of? Is she making jewelry and wearing it or giving some of it as gifts? I had one of those clients that was doing all of that and had big dreams with tiny profits. lol