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Tax application updates

Tax application updates

Some tax highlights that apply  to many of our clients and readers are contained in this article.  At Fragnoli & Company, CPAs in Brentwood, TN and Hendersonville, TN believe that it is critical that we keep our clients and prospective clients up to date on proposed and/ or recent tax law changes and procedure updates.  For example, the Internal Revenue Service is being urged to move up its W-2 filing deadline to January 31 and to lower the threshold for requiring electronic filing of W-2 returns in an effort to curb the growing trend of identity theft related tax fraud.  Currently, the filing deadline for W-2’s is February 28th.  The electronic filing of W-2 returns is currently 250.  The Social Security Administration  stated that to have any meaningful impact, the threshold requirement for e-filing W-2’s would have to be reduced from 250 to 5-10 W-2’s.  This impacts almost all small businesses if the Social Security Administration gets their way.  Accordingly, if you process and file your W-2’s in-house, make sure you follow the news on this subject.

Another item of not is that impacts many of you reading this article is the Internal Revenue Service’s announcement of the new 2014-2015 per diem rates that taxpayers can use, starting October 1, to substantiate their expenses for lodging, meals and incidental expenses when traveling away from home.  The rates in Notice 2014-57 , http://www.irs.gov/pub/irs-drop/n-14-57.pdf include the special transportation industry rate, the rate for the incidental expenses only deduction, and the rates and list of high-cost localities for purposes of the high-low substantiation method.  The special meal and incidental expense rates for taxpayers in the transportation industry are $59 for travel in the continental United States and $65 for travel outside the continental United States. Use of a per diem substantiation method is not mandatory. A taxpayer may substantiate actual allowable expenses if the taxpayer maintains adequate records or other sufficient evidence for proper substantiation.

The Internal Revenue Service has changed the HSA deductible limit for 2015 from $1,250 to $1,300 for self-only coverage and from $2,500 to $2,600 for family and embedded deductible coverage. Accordingly, review your individual medical plans and consider the impact of this change.

These changes are an excellent example of why it is important that individuals and businesses stay in contact with their tax professional (CPA, EA, etc.) throughout the year.  Knowledge and use of these changes can reduce your tax liability and offset the cost of that tax professional.  Should you have any questions or would like to learn more about how Fragnoli & Company, CPAs services its clients, please feel free to contact our office directly to schedule an appointment at (615) 377-0705.