Planning Ahead: 2017 Health Savings Account Limits

BY Chad Ryder

The Internal Revenue Service (IRS) has released the annual contribution limitations for health savings accounts (HSAs) and the minimum deductible amounts and maximum out-of-pocket expense amounts for high-deductible health plans. These limitations are updated annually to reflect cost-of-living adjustments. Business owners should inform employees of the HSA contribution limits increase for 2017.

Employers commonly offer employees HSA contributions as part of their healthcare benefit packages. HSAs are a popular option because of its dual purpose. Employees can utilize HSAs to save for the future or pay for qualified medical expenses tax free.

Under Sec. 223 of Rev. Proc. 2016-28, individuals who participate in a health plan with a high deductible are permitted a deduction for contributions to HSAs set up to help pay their medical expenses. To be eligible to contribute to an HSA you must participate in a high deductible health plan.

The following chart summarizes the contribution and out-of-pocket limits for HSAs and high-deductible health plans for 2017. There was only one minor change between 2016 and 2017.

  2016 2017 Change
HSA contribution limit Self: $3,350

Family: $6,750

Self: $3,400

Family: $6,750

Self: $50

Family: No Change

HSA catch up contribution (age 55+) $1,000 $1,000 No Change
HDHP minimum deductible Self: $1,300

Family: $2,600

Self: $1,300

Family: $2,600

No Change
HDHP maximum out of pocket Self: $6,550

Family: $13,100

Self: $6,550

Family: $13,100

No Change

Employers should remind employees who are contributing to or using their HSA:

  • They have until April 15, 2018 to make contributions for the 2017 tax year.
  • Withdrawing from their HSA for nonqualified purposes is subject to income tax.
  • Nonqualified withdrawals are also subject to a 20% tax penalty unless an exception applies.

The professionals in our office can clarify any questions you may have on HSAs. Call on us today.

Dinner With Bauman

BY Bauman Associates

 

Students, don’t miss out on a free Dinner with Bauman!

Contrary to popular belief, there IS such a thing as a FREE dinner! Join accounting professionals from Bauman Associates on October 19th for pizza, door prizes and a unique opportunity to find out what it is like to work in a public accounting firm. Students will also learn about the employment opportunities Bauman offers and network with leaders in the field. This event will take place in Centennial Hall at UWEC, Room 320 from 4:00 – 6:30 pm. Space is limited and there is a deadline, so fill out and submit your application today (or by Thursday, October 12th). We look forward to seeing you there!

 Click here for Dinner with Bauman Application

Education Tax Credits: Two Benefits to Help You Pay for College

BY Justin Koppa

If you paid for college it can mean tax savings on your federal tax return. There are two education credits that can help you with the cost of higher education. These credits include the American Opportunity Credit and the Lifetime Learning Credit.  Here are some important facts you should know about these education tax credits.

The American Opportunity Tax Credit allows you to claim up to $2,500 per eligible student. Some tips to consider under this tax credit:

  • The credit only applies to the first four years at an eligible educational institution.
  • It reduces the amount of tax you owe. If the credit reduces your tax to less than zero, you may receive up to $1,000 as a refund.
  • It is available for students earning a degree or other recognized credentials.
  • The credit applies to students going to school at least half-time for at least one academic period that started during the tax year.
  • Costs that apply to the credit include the cost of tuition, books, required fees and supplies.

The Lifetime Learning Credit is limited to $2,000 per tax return, per year. Some tips to consider under this tax credit:

  • This credit is available for an unlimited number of years as it applies to all years of higher education at an eligible educational institution. This includes classes for learning or improving job skills.
  • The credit is limited to the amount of your taxes.
  • Costs that apply to the credit include cost of tuition, required fees, books, supplies and equipment.

Let Us Help You Leverage What You Can Learn from Your Tax Return

BY Jay Grokowsky

What does your tax return say about your financial situation? The fact is, the paperwork you file each year offers excellent information about how you are managing your money—and about areas where it might be wise to make changes in your financial habits. If you have questions about your financial situation, remember that we can help. Our firm is made up of highly qualified and educated professionals who work with clients like you all year long, serving as trusted business advisors.

So whether you are concerned about budgeting; saving for college, retirement or another goal; understanding your investments; cutting your tax bite; starting a business; or managing your debt, you can turn to us for objective answers to all your tax and financial questions.

We Can Help You Address the Issues that Keep You Up at Night

Where will your business be in five years? Would strategic budget cuts in some areas improve your company’s health? Are there ways you can boost revenue? If you are nearing retirement, is there a buyer or successor in the wings? These are the kinds of questions that keep many business owners up at night. Fortunately, we can help you address these questions and maybe sleep a little easier.

We can review your financial situation and develop creative strategies to minimize your tax liability and help you meet your financial goals. Contact one of our professionals today.

2017 Standard Mileage Rates Announced for Business, Charitable, Medical and Moving Purposes

BY Justin Koppa

The Internal Revenue Service recently issued the 2017 optional standard mileage rates to be used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

As of January 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:

  • 53.5 cents per mile for business miles driven (54 cents for 2016)
  • 14 cents per mile driven in service of charitable organizations (14 cents for 2016)
  • 17 cents per mile driven for medical or moving purposes (19 cents for 2016)

It is important to remember that a taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. For more information, please contact one of our professionals today.

New Form I-9 for Employment Eligibility Verification, Effective 1/22/2017

BY Bernie Hull

Congress passed the IRCA (Immigration Reform and Control Act) in 1986, which required the use of the Form I-9 to verify identity and employment authorization for all new employees, including U.S. citizens hired after November 6, 1986. New hires are required to complete this form within three (3) business days of the date of hire. Employers are required to retain the completed Forms I-9 for all employees, as long as the individuals work for the employer and until one year after the date the employment is terminated or three years after date of hire, whichever is later.

On November 14, 2016, USCIS (U.S. Citizenship and Immigration Services), published a revised version of the Form I-9. Employers must begin using the new version by January 22, 2017.  The form has been modified to make it easier to complete on a computer, including prompts to ensure information is entered correctly and drop down lists and other enhancements.

You may obtain a copy of the new form (paper version and fillable PDF version) and a copy of the Handbook for Employers—Guidance for Completing Form I-9 (publication M-274) at the official website www.uscis.gov/i-9.  There is no fee to obtain these forms via this website.

Preparing Your Business for New Filing Deadlines

BY Robert Sorensen

In July of 2015, President Obama signed into law a new Highway Funding Bill. Section 2006 of that bill modifies the tax filing due dates for tax years beginning after December 31, 2015. The filing deadlines for a variety of entities, including partnerships and C corporations, will change.

As a business owner, it is important to be aware of the new filing deadlines to make sure you are submitting tax returns timely. The following two questions will determine your due date:

  1.  What entity is your business considered?
  2.  When is your tax year end date?

The new due dates are effective for tax years beginning after December 31, 2015 with the exception of C Corporations with fiscal years ending on June 30 (new due dates for June 30 year ends will go into effect for returns with taxable years beginning after December 31, 2025).

We have highlighted below some of the major changes. For a complete list of new due dates, please refer to our giveaway this month, a copy of the AICPA’s resource which includes a list of all original and extended tax return due dates.

Return Type Prior Due Dates New Due Dates
Partnership (calendar year) April 15 March 15
S Corporation (calendar year) March 15 No change
C Corporation (calendar year) March 15 April 15
FinCEN Report 114

(Replaces FBAR return)

June 30 April 15
Individual Form 1040 April 15 No change
 

Extension Modifications for Calendar Year Filers

Form Extension
1065 6 Months
1041 5 ½ months
5500 3 ½ months
990 6 months
3520-A and 3520 6 months
FinCEN report 114 6 months
 

Extension Modifications for C Corporations

June 30 FYE 7 months
December 31 FYE 5 months
All other FYE’s 6 months
After 12/31/25 All revert back to 6 months

Will individual tax filers be affected by the new due dates?

Yes, those who file foreign bank account reports will notice a change. The due date for FBARs will move from June 30 to April 15. FBAR filers are also applicable to receive a six-month extension, similar to tax returns.

 Trust Returns

The extension dates for trust returns are receiving an extension. Trust returns are still due in April, but the extension will change from September 15 to September 30.

You will want to review your return-filing procedures and determine what changes need to be made to comply with the new dates. The professionals in our office can help you understand how this will affect your business; call on us today.

You’re Invited to Attend: Protecting Your Business 2016

BY Bauman Associates

bauman-event-banner-title

We work with entrepreneurs and business owners in all phases of the business life cycle, helping them get started on the right foot, navigate the inevitable growing pains and when the time is right, prepare for transition out of the business and into their next adventure. Whether you’re forming a brand new company, entering a growth phase or anticipating retirement or another opportunity, we’re here to help you Protect Your Business so that you can succeed and thrive.

On December 14th & 15th, our experienced professionals will speak to business owners and entrepreneurs in our community on the following subjects:

Business Valuations

Why are businesses appraised?  What are the steps that a business valuation expert uses to value a business?  What items affect the value of your business?  Businesses may need a valuation for a variety of reasons, including mergers or acquitions, internal succession, buy-sell agreements, financing, income tax reasons and more.

Topics we’ll cover include:

  • Overview of the business valuation process
  • Key items that affect the value of a business
  • How to improve the value of your business

We will review a sample valuation report, explain what factors go into determining the value of a business and show how owners can use this information to increase the value of their businesses.

Exit Strategies

It’s helpful to know what your business is worth.  But even more helpful is knowing what you’ll have left over after paying income taxes when you sell the business.  We’ll look at some of the exit strategies available when selling or transferring a business and how you can maximize the after tax cash flow from selling your business.

Topics we’ll cover include:

  • Importance of planning in advance – WELL in advance
  • Effect of business legal structure on income taxes – current and future
  • Non-taxable transfers of ownership vs. Taxable transfers of ownership
  • Income tax considerations of asset sales
  • Income tax considerations of stock sales
  • Financing the sale

Fraud

Fraud and cyber crimes are at an all-time high. Businesses of all kinds are susceptible to fraud in various forms. Business owners today need to be diligent in order to protect their business and their customers.

Topics we’ll cover include

  • The types of fraud
  • Discuss the cost of fraud to a business
  • Share various case studies on how fraud has been committed
  • Review the fraud risk factors and internal control assessments

During the event, attendees will also enjoy networking, lunch and an informative roundtable.

Presenters: Jay Grokowsky, CPA; Nathan Kalepp, CPA; Joshua Schroeder, CPA

 

Details:

Wednesday, December 14th

8:30 am – 2:00 pm

Holiday Inn, Eau Claire

button-11

 

Thursday, December 15th

8:30 am – 2:00 pm

Hudson House, Hudson

button-13

 

 

Bauman Associates Launches New Website: baumancpa.com

BY Bauman Associates

New website features key tools and resources for accounting, taxes and business consulting.

Eau Claire and Hudson, WI – February 23, 2016:  Bauman Associates is pleased to announce the launch of their new website, baumancpa.com. This website was developed to better meet the needs and expectations of the firm’s clients, employees and friends. Featuring responsive design, the site is viewable on any mobile device.

“Our clients need easy access to the right information to run their business on their time,” said Managing Principal John Satre. “This new site makes accessing that information easier and fulfills our promise to be accessible to our clients.”

Special features were developed to meet the needs of Bauman clients and keep them informed. Highlights include:

  • Tax and accounting alerts
  • Industry insights and community news
  • Easy access to partner information from any page of the site
  • Calculators and links
  • Business guides

In addition, Bauman’s tax and accounting alerts, industry insights, company announcements and seminar information will be shared both on our website and through our newsletter and e-communications.

About Bauman Associates, Ltd

Bauman Associates was founded in 1947 as a certified public accounting firm and has offices in Eau Claire and Hudson, Wisconsin.  The firm provides multi-discipline professional services to businesses and individuals including business consulting; technology training; human resource consulting; tax strategy, planning and preparation; accounting and auditing services; and estate, trust and retirement planning. For more information, visit www.baumancpa.com or call 888‐952‐2866.

CPA Firm Bauman Associates Announces 3 New Principals

BY Bauman Associates

Eau Claire and Hudson, WI – November 23, 2015:  Bauman Associates is pleased to announce the promotion of Eric Davidson, Nathan Kalepp and Travis Schneider to Principal. All three individuals have been with the firm for several years and play an important role in the delivery of services to our clients and the leadership of our firm.

Eric and Nathan will serve as Principals in the Eau Claire office and Travis will be the Principal leading the Hudson office.

“We believe that developing great people is critical to the success of our firm and our clients.  We want to commend and congratulate these individuals for all of their hard work,” stated Managing Principal John Satre.

About Bauman Associates, Ltd

Bauman Associates was founded in 1947 as a certified public accounting firm and has offices in Eau Claire and Hudson, Wisconsin.  The firm provides multi-discipline professional services to businesses and individuals including business consulting; technology training; human resource consulting; tax strategy, planning and preparation; accounting and auditing services; and estate, trust and retirement planning. For more information, visit www.baumancpa.com or call 888‐952‐2866.