Category: Blog

IRS Releases New Form W-4 for 2018

With the new tax law, how much will you owe the IRS when you file your 2018 tax return next April?

Now that most of our clients have their 2017 taxes filed, it is time to start taking action regarding 2018 taxes. The Tax Cuts and Jobs Act or TCJA has an impact on just about every area of tax one can think of in 2018. These changes include increasing the standard deduction, removing the personal exemption, and changing the tax rates and brackets. The impact of these changes will affect both employees and business owners. The first effect you or your employees might notice is that some employees’ take-home pay may have increased due to the adjustment in IRS withholding tables. These larger paychecks are wonderful, but employees should be cautious. An increase in take-home pay might be deceiving because you may actually be under withholding your federal income taxes. If your pay is being under-withheld, it could be a big shock come tax time when you owe the IRS money next April. In order to avoid a surprise tax bill for the 2018 tax year, employees should update their W-4 form. To help individuals deal with 2018 withholding issues, the IRS has recently released a new W-4 Form for 2018 and a Withholding Calculator.

The W-4 form is how employees tell their employers how much money to withhold from their paychecks. All new hires after March 30th, 2018 are required to use the new 2018 W-4 form. However, current employees who have filled out older versions of the W-4 are not required to update their W-4. Even though current employees are not required to update their W-4s the IRS is encouraging all employees to review their withholdings for 2018. The IRS is worried people may have dated withholding calculations based on the previous tax law. In order for employees to better understand how much tax should be withheld from their paychecks for 2018, the IRS has released a new tool called the Withholding Calculator.

The IRS Withholding Calculator is intended to help employees make changes to their W-4 based on their specific financial situation. Having a copy of one’s completed 2017 taxes will help you navigate your way through the questions asked by the IRS Withholding Calculator. The information on your 2017 taxes will help you input accurate estimates for the 2018 tax year. After imputing all the data that the IRS Withholding Calculator requires, the calculator will output the information needed to update one’s W-4. Employers should encourage employees to use the IRS Withholding Calculator. ADP has put out a sample notice employers can provide to your employees informing them be aware of withholding changes and consider filling out a new W-4. (See sample notice below)

As an employee, making sure that you are having the right amount of money withheld from your paychecks is crucial to avoiding a tax bill next April. While the IRS is advising everyone to review their withholdings it is especially important for two-income families, people with two or more jobs at the same time, people who only work part of the year, people with children who claim credits such as the Child Tax Credit, people who itemized deductions in 2017, and people with high incomes and more complex tax returns. These groups of people are specifically affected by the changes in the tax law.

However, everyone should use the IRS Withholding Calculator to estimate their 2018 withholdings. This simple action will save you from a surprise tax bill next April. Contact your tax professional if you need help determining the amount that should be withheld from your paychecks in 2018.

Bill Hesch is a CPA, PFS (Personal Financial Specialist), and attorney licensed in Ohio and Kentucky who helps clients with their financial and estate planning. He also practices elder law, corporate law, Medicaid planning, tax law, and probate in the Greater Cincinnati and Northern Kentucky areas. His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.

(Legal Disclaimer: Bill Hesch submits this blog to provide general information about the firm and its services. Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel. While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog. Bill Hesch does not enter into an attorney-client relationship with any online reader via online contact.)

IRS Withholding Calculator

https://apps.irs.gov/app/withholdingcalculator/

Example Notice to Employees

Re: 2018 Income Tax Withholding

Dear ____________:

You may have noticed lower federal income tax deductions and a corresponding increase in net pay in your recent paychecks.

The recent Tax Cuts and Jobs Act (TCJA) changed federal income tax rates and brackets, among other things, beginning in 2018. New IRS withholding tables were put into effect in late January.

The TCJA generally reduced federal income taxes for most people. However, depending on your specific tax situation, you might owe additional tax when you file your 2018 income tax return, even if you normally receive a tax refund from the IRS at year-end.

You may want to consider updating your withholding allowances at this time. The IRS recently released the 2018 Form W-4, (Employee’s Withholding Allowance Certificate), and related instructions, which you can find at www.irs.gov/W4.

The IRS also offers an online “W-4 Calculator,” at https://www.irs.gov/individuals/irs-withholding-calculator. This calculator may help you determine the correct number of withholding allowances to claim.

The IRS will not require all employees to file a new Form W-4 for 2018. However, for some people it may be advisable. The TCJA made many other changes that could affect your 2018 income taxes. For questions regarding your personal tax situation, talk with your tax advisor, or visit www.IRS.gov.

ABLE Accounts

Last month we told you about Special Needs Trusts, which are an important tool in planning for the support and care of a disabled person. Today, we will continue that conversation and tell you a little about how you can use both a Special Needs Trust and an ABLE Account to plan for the support and care of a disabled person.

ABLE Accounts have been talked about on our blog in the past, but here is a little refresher. ABLE Accounts are available in both Kentucky and Ohio, through the National Achieving a Better Life Experience (“ABLE’) Act. ABLE Accounts allow for a disabled person to save and invest money without losing eligibility for certain public benefits programs, like Medicaid, SSI, or SSDI. Additionally, earnings in your ABLE Account are not subject to federal income tax, so long as you spend them on “Qualified Disability Expenses.” Some examples of “Qualified Expenses” include education, housing, transportation, employment support, health prevention and wellness, assistive technology and personal support. However, ABLE Accounts have limited deposits of $15,000 a year, lifetime funding limits, and a medicaid payback provision. Additionally, the onset of the disability must have occurred prior to age 26. These restrictions on ABLE Accounts make planning all the more important.

So you might be asking, which planning tool do I need? A Special Needs Trust or an ABLE Account? The answer could be both. ABLE Accounts allow for more accessibility of funds, with a prepaid debt card feature. The card does not pull money directly out of your ABLE Account. Instead, you get to choose a specific amount of money to load onto your card. This way, you can better control budgets and plan for your Qualified Disability Expenses. They also allow the disabled person to easily receive and save funds from employment without affecting government benefits. If a disabled person is able to work, SSI limits benefits for that person if they have a balance in personal bank account exceeding $2,000. ABLE Accounts allow a person on SSI to work and retain income without diminishing their maximum SSI benefit. However, the money in an ABLE Account will be counted as a resource for SSI purposes if the balance increases over $100,000.

Unfortunately, the funds placed in a ABLE Account are not protected long term because of the medicaid payback provision upon the account holders death. If a family member, by gift or inheritance, plans to leave money for a disabled person the Special Needs Trust is the preferred planning tool. The Special Needs Trusts discussed last month can hold unlimited funds while also allowing for the disabled person to continue receiving SSI.

There are many considerations to look at when trying to protect government benefits for a disabled person and making sure to plan properly is so important. The rules for both Special Need Trust and ABLE Accounts are very complex and it is highly recommended that you work closely with your attorney, CPA, and financial advisor.

 

Bill Hesch is a CPA, PFS (Personal Financial Specialist), and attorney licensed in Ohio and Kentucky who helps clients with their financial and estate planning. He also practices elder law, corporate law, Medicaid planning, tax law, and probate in the Greater Cincinnati and Northern Kentucky areas. His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.

(Legal Disclaimer: Bill Hesch submits this blog to provide general information about the firm and its services. Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel. While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog. Bill Hesch does not enter into an attorney-client relationship with any online reader via online contact.)

Inherited IRA Options for the Surviving Spouse

Did you know that when you inherit an IRA you can limit your income tax liability by deciding how distributions are made to you?  Unfortunately, many IRA beneficiaries don’t know they have distribution options and so they cash in their inherited IRA and expose themselves to significant income tax liabilities.  The options available to IRA beneficiaries vary depending on if the beneficiary is a surviving spouse or a non-spouse and if the IRA is a traditional IRA or Roth IRA. This article will focus on the typical traditional IRA distribution options for a surviving spouse to limit the surviving spouse’s tax liabilities. Click here for options for non-spouse beneficiaries. Not all distribution options work best for every beneficiary, so beneficiaries are encouraged to consult with their financial advisor, CPA, and attorney to find out which option works best for them.

Option 1: Treat IRA as Own

One option surviving spouses have is treating the IRA as their own.  Surviving spouses can treat inherited IRAs as their own by naming themselves as the account owner or by rolling the inherited IRA into their own IRA account.  This is often the best choice if the deceased spouse was older than the surviving spouse because it allows the surviving spouse to delay taking the IRA’s Required Minimum Distributions (RMDs) until he or she reaches age 70½ rather than using the deceased spouse’s age. The benefits of this option are best described using an example: Husband dies at age 73 leaving his IRA to his wife who is age 62.  Wife subsequently chooses to roll over the IRA into her own.  Although Husband started taking his RMDs at age 70½, Wife is not required to take RMDs on the rollover IRA until she reaches age 70½.  This choice effectively resets the IRA’s RMDs using the surviving spouse’s younger age and offers the surviving spouse additional years of tax-deferred growth.

Option 2: Leave Ownership in Deceased Spouse’s Name

The second option for a surviving spouse beneficiary is leaving ownership of the IRA in the deceased’s spouse’s name, for the benefit of the surviving spouse.  This is often the best choice for a surviving spouse if the deceased spouse was younger than the surviving spouse.  If the surviving spouse chooses this option, the RMDs are determined using the deceased spouse’s age at the time of death instead of the surviving spouse’s age, which presents two possibilities:

(1) if the deceased spouse died after age 70½: the RMDs must be taken on the longer of   the deceased spouse’s life expectancy based on his/her previous RMD schedule or the     surviving spouse’s life expectancy; or

(2) if the deceased spouse died before age 70½: the surviving spouse can defer RMDs      until the deceased spouse would have been required to take them.

Keep in mind that in order for this option to work properly, ownership of the IRA must stay in the decedent-owner’s name, for the benefit of the surviving spouse beneficiary.  If the surviving spouse has already transferred the IRA ownership into his or her name, the surviving spouse will not receive the advantages of using this option.

Option 3: Rollover IRA with 5 Year Distribution

Another option for a surviving spouse beneficiary is to rollover the IRA into their name and cash out the IRA within five years of December 31 of the year following the deceased spouse’s date of death.  This option gives the surviving spouse access to money relatively soon and spreads out the tax liability over a five year period, rather than in one year if a lump sum distribution is taken.

Option 4: Lump Sum Distribution

A surviving spouse beneficiary also has the option to cash in the IRA and take a lump sum distribution; however, the spouse will be responsible for paying income taxes on the distribution in the year the distribution is made. This option gives the surviving spouse immediate access to money but can potentially subject the IRA income to higher tax rates.

The traditional IRA distribution rules and options for surviving spouse beneficiaries are complicated. If you are a surviving spouse and listed as the beneficiary of your deceased spouse’s IRA, meet with your CPA or tax attorney to decide what option will work the best minimize your taxes.

 

Bill Hesch is a CPA, PFS (Personal Financial Specialist), and attorney licensed in Ohio and Kentucky who helps clients with their financial and estate planning.  He also practices elder law, corporate law, Medicaid planning, tax law, and probate in the Greater Cincinnati and Northern Kentucky areas.  His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.

(Legal Disclaimer:  Bill Hesch submits this blog to provide general information about the firm and its services.  Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel.  While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog.  Bill Hesch does not enter into an attorney-client relationship with any online reader via online contact.)

Inherited IRA Options for the Non-Spouse Beneficiary

Did you know that when you inherit an IRA you can limit your income tax liability by deciding how distributions are made to you?  Unfortunately, many IRA beneficiaries don’t know they have options and so they cash in their inherited IRA and expose themselves to significant income tax liabilities.  The options available to IRA beneficiaries vary depending on if the beneficiary is a spouse or non-spouse, so this article will focus on the three distribution options non-spouse IRA beneficiaries typically have to limit their tax liabilities. Not all distribution options work best for every situation, so IRA beneficiaries are encouraged to consult with their CPA and attorney to find out which option works best for them.

Option 1: Rollover IRA with Five Year Distribution

If an IRA owner dies and designates a non-spouse beneficiary, such as a child, parent, sibling, or friend, the beneficiary can choose to rollover the IRA into their name, but the entire IRA must be distributed to the beneficiary within five years of December 31 of the year following the IRA owner’s date of death.  This option gives the non-spouse beneficiary access to money relatively soon and spreads out the tax liability over a five year period, rather than in one year if a lump sum distribution is taken.

Option 2: Stretch IRA

The second option for a non-spouse beneficiary is a stretch IRA.  With a stretch IRA, the non-spouse beneficiary receives the IRA’s annual required minimum distributions (RMD) over the beneficiary’s remaining life expectancy. The beneficiary’s remaining life expectancy is determined by the beneficiary’s age in the calendar year following the year of death and reevaluated each year.  For example, if the IRA owner dies and his 50-year-old daughter is the sole beneficiary, the daughter may choose to stretch out the IRA over her remaining life expectancy and will only receive the RMD each year.  Beneficiaries who elect this option are only responsible for paying income taxes on the RMD they receive each year.  This option has more favorable tax rules but limits the amount of money available to the beneficiary on an annual basis.

Beneficiaries who choose a stretch IRA need to be aware that ownership of the IRA must stay in the decedent-owner’s name, for the benefit of the beneficiary.  If the beneficiary has already transferred the IRA ownership into their name, the IRA will be subject to the IRA Rollover rules over a 5 year period.

Option 3: Lump Sum Distribution

A non-spouse beneficiary also has the option to completely cash in the IRA and take a lump sum distribution. The beneficiary will be responsible for paying income taxes on the distribution in the year the distribution is made.  This option gives the beneficiary immediate access to money but can potentially subject the IRA income to higher tax rates.

The IRA distribution rules and options for a non-spouse beneficiary are complicated. If you are the beneficiary of an inherited IRA, meet with your CPA or tax attorney to decide what option will work the best minimize your taxes.

 

Bill Hesch is a CPA, PFS (Personal Financial Specialist), and attorney licensed in Ohio and Kentucky who helps clients with their financial and estate planning.  He also practices elder law, corporate law, Medicaid planning, tax law, and probate in the Greater Cincinnati and Northern Kentucky areas.  His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.

(Legal Disclaimer:  Bill Hesch submits this blog to provide general information about the firm and its services.  Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel.  While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog.  Bill Hesch does not enter into an attorney-client relationship with any online reader via online contact.)

How to Have “The Talk” with Your Aging Parents

Remember having “the talk” with your parents in middle school?  That awkward conversation you had with your mom or dad where they tried to explain the facts of life to you while you desperately searched for an excuse to end the conversation?  Well get ready to have another “talk” with your parents, only this time, you’ll be discussing their end-of-life planning, not the birds and the bees.

What does this “talk” need to cover?  Generally, this conversation needs to address the issues surrounding your parents’ twilight years, such as retirement planning, nursing home preferences, funeral arrangements, wills and trusts, powers of attorney, and possible Medicaid planning. Specifically, an estate planning and elder law attorney can identify your parents’ unique estate planning and elder law planning issues and assist with implementing their end-of-life planning strategies.  To have a successful “talk” with your parents, consider using this four-part strategy:

Don’t wait for tragedy to strike

Don’t wait for tragedy to strike before having the conversation.  I often see that families put off talking about these issues until an unexpected illness or death shocks the family, at which time it may be too late to do anything.

Have the conversation with your parents right away, while they are still healthy and able to make informed decisions for themselves.  This becomes even more important if your parents are older or if you think a parent is showing signs of memory problems or is not feeling well on a regular basis. Having these discussions in advance can mitigate problems down the road and can remove any feelings of doubt you may have if you need to make a decision on their behalf.

Such topics are sensitive and your parents may try to avoid having the conversation with you altogether.  Schedule a specific time and place with your parents to have this conversation so that they can be prepared for it.  If you unexpectedly spring the discussion on them, they may get defensive or shut down.  If your family will be in town for the holidays, Thanksgiving and Christmas can be ideal times to schedule the family meeting.  You might also consider getting your parents’ attorney and CPA involved in the meeting.

Make estate planning documents a priority

Not every family needs a complicated trust or an aggressive Medicaid planning strategy.  Your parents’ estate planning attorney can assess your parents’ unique situation and make a recommendation for what they might need.  If your parents feel overwhelmed and choose to do nothing, you need to at least advocate that they implement or update their Last Wills and Testaments, Financial Powers of Attorney, and Health Care Powers of Attorney and Living Wills.  These are the basic estate planning documents that every person needs in place, and having them will make everyone’s lives much easier.  If your parents don’t have an attorney or are unable to leave their home, help them find an estate planning and elder law attorney who is willing to come to their home and will handle their situation in the safety of their home.

Address finances carefully

Many in your parents’ generation are cautious and secretive about their finances.  Don’t assume that your parents will be comfortable sharing details of their wealth or debts with you.  If they aren’t comfortable with sharing this information, don’t be pushy.  Simply find out the names of their financial advisor, attorney, and CPA so you know who to contact in case of a financial emergency and encourage your parents to do elder law, financial, and estate planning with them.

Don’t be overly persuasive

Remember that this conversation is about planning for what is best for your parents in their twilight years, not maximizing your inheritance.  You may need to walk a fine line between arguing a position you feel is right for them and not coming off as being greedy.  You don’t want to ruin your relationship with your parents because they think you’re more concerned about their money than what they want to do regarding their nursing home needs in the future.  I recommend that you discuss what nursing home they would want to go to if the need arose unexpectedly and suddenly (i.e. rehab following a stroke or a fall).

Also remember that your parents will be feeling vulnerable, so if you disagree with something they feel strongly about, respectfully present your arguments and recommend that they speak with their attorney and CPA for professional advice.

Much like in middle school, having “the talk” with your parents will be uncomfortable for everyone involved.  However, having open, respectful, and honest dialogue with your parents will give them peace of mind that you are looking out for their best interests.

 

Bill Hesch is an attorney, CPA, and PFS (Personal Financial Specialist) who is licensed in Ohio and Kentucky and helps clients get peace of mind with their tax, financial, and estate planning matters.  He focuses his practice in the areas of elder law, corporate law, Medicaid planning, tax law, estate planning, and probate in the Greater Cincinnati and Northern Kentucky areas.  His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.

(Legal Disclaimer:  Bill Hesch submits this blog to provide general information about the firm and its services.  Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel.  While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog.  Bill Hesch does not enter into an attorney-client relationship with any online reader via online or print contact.)

New POA Law Highlights the Need for Estate Planning Review

Financial elder abuse, although often overlooked, is a serious problem in our world today.  As baby boomers age and the average life expectancy rises, the number of elder abuse cases will continue to increase.  More often than not, the abuser in these types of cases is someone in a trusted role – a caretaker, a child, or even an agent appointed in a financial Power of Attorney.  While most agents acting under a Power of Attorney are honest, some have abused their power.  To prevent and punish this kind of misconduct, the Ohio legislature passed the Uniform Power of Attorney Act (UPOAA) in 2012.

The UPOAA says that unless certain “hot powers” are specifically granted in a Power of Attorney document, an agent cannot do the following: (1) create a trust or make changes to an existing trust; (2) make gifts; (3) create or change rights of survivorship for certain assets; (4) change beneficiary designations; (5) allow others to serve as the agent; or (6) waive rights to be a beneficiary under certain annuities and retirement plans.

If these “hot powers” identified above are blindly granted to the agent in a Power of Attorney, he or she has almost unlimited power to deplete assets or change an estate plan.  One could argue that everyone should just leave these “hot powers” out of their Power of Attorney to prevent that from happening.

However, there are certain situations where it might be necessary for someone to grant these powers to his or her agent, and he or she may not realize it unless they consult with an estate planning attorney. For example, effective August 2016, Ohio Medicaid law now requires that a Medicaid recipient living in a nursing home set up a trust if the recipient’s monthly income exceeds a certain limit.  Let’s say a Medicaid recipient has dementia and is she determined to be incapacitated.  In the recipient’s Power of Attorney, the agent is not granted the specific power to set up trusts on the recipient’s behalf.  Since the recipient herself lacks the capacity to set up trusts, she could become ineligible for Medicaid assistance and even evicted from the nursing home!

Furthermore, if an elderly person or couple wants to protect their nest egg from the nursing home, they may want to grant their agent the “hot power” to make gifts to family members in their Power of Attorney documents.  That way, their agent can implement advanced Medicaid planning strategies on their behalf if the elderly person or couple becomes incapacitated. Advanced Medicaid planning typically requires making gifts to an irrevocable trust or to loved ones directly to protect assets from being depleted.  These gifts must be made at least five years before applying for Medicaid or the applicant will be ruled ineligible for benefits for an extended period of time.  Last minute Medicaid planning may require the agent to make gifts and purchase an annuity to pay for nursing home expenses during a period of Medicaid ineligibility.

If you already have a financial Power of Attorney in place, contact your estate planning attorney to find out what updates, if any, need to be made to your estate plan as a result of these recent law changes. If you don’t already have a financial Power of Attorney in place, contact an estate planning attorney right away.  He or she can review your unique situation and determine which “hot powers” should be included in your Power of Attorney document. Your estate planning attorney can also counsel you through the important decision of selecting your trusted agent or co-agents.

 

Bill Hesch is an attorney, CPA, and PFS (Personal Financial Specialist) who is licensed in Ohio and Kentucky and helps clients get peace of mind with their tax, financial, and estate planning matters.  He focuses his practice in the areas of elder law, corporate law, Medicaid planning, tax law, estate planning, and probate in the Greater Cincinnati and Northern Kentucky areas.  His practice area includes Hamilton County, Butler County, Warren County, and Clermont County in Ohio, and Campbell County, Kenton County, and Boone County in Kentucky.

(Legal Disclaimer:  Bill Hesch submits this blog to provide general information about the firm and its services.  Information in this blog is not intended as legal advice, and any person receiving information on this page should not act on it without consulting professional legal counsel.  While at times Bill Hesch may render an opinion, Bill Hesch does not offer legal advice through this blog.  Bill Hesch does not enter into an attorney-client relationship with any online reader via online or print contact.)

Amy E. Pennekamp-Ohio Super Lawyers Rising Star 2016

William E. Hesch Law Firm, LLC is pleased to announce that attorney Amy E. Pennekamp has been named a 2016 Ohio Super Lawyers® Rising Star.  Attorneys are chosen through the independent research of the publishers at Super Lawyers®, a Thomson Reuters business.

Rising Stars are age 40 or younger or have been practicing law for 10 years or less, and represent the top up-and-coming attorneys in the state. Less than 2.5 percent of lawyers are selected for Rising Star status. Super Lawyers®, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a rigorous multi-phased process that includes a statewide survey of lawyers, an independent research evaluation of candidates, and peer reviews by practice area.

Learn more about Amy and find her contact information, here.

Amended Substitute House Bill 5 (HB 5)

Dear Client and Friends:

This year Municipal tax reform will take effect under the Amended Substitute House Bill 5. The Amended Substitute House Bill 5(HB 5) was signed into law on December 19, 2015. The new provisions take effect beginning on or after January 1, 2016. HB 5 provides some relief to the overly burdensome process for businesses in determining what local tax to pay and withhold from their employees when they do business in multiple municipalities.

I have outlined just a few of the key provisions under the Municipal Tax Reform:
(1) Mandatory 5 year Net Operating Loss carry forward. Requires all municipal corporations to allow businesses to deduct new net operating losses(NOL) and to allow a five-year carry forward of such losses first incurred in taxable years beginning on and after January 1, 2017, and permits pre-existing losses to continue to be carried forward if current ordinances allow.
(2) Withholding provisions:
a. The “occasional entrant rule” will increase the number of days from 12 to 20 days whereby a traveling employee may enter a municipality before their employer is required to withhold on wages earned.
b. Employers will generally be required to begin withholding on the 21st day the employee conducts business within a municipality. There are limitations to the new law. If an employer expects the employee will work within a municipality more than 20 days, the employer will be required to begin withholding on day 1.
c. A “small employer” withholding exception will be available for businesses with gross receipts of less than $500,000. These businesses will not be subject to the 20 day rule and will only be required to withhold income tax for their principle work municipality (fixed location). Employee’s not subject to the local tax at the business’s fixed location can apply for a refund, but the employer still needs to withhold tax on their fixed location.

Listed above are just a few of the tax changes taking effect on January 1, 2016. If you would like a copy of the summary of the Amended Substitute House Bill 5, please give us call. The new law only gives taxpayers a short time to educate and prepare themselves for numerous changes in the municipal tax law. We will be working with our clients throughout the coming weeks to help them implement these changes. If you have any questions or have concerns about the effect of the changes on your business, please call us at (513) 731-6612.

Peace of Mind

Submitted by: Chris Allen, President – The Business Spotlight, Inc. and Committee Member of Emerging 30

The William E. Hesch Law Firm, headquartered in Cincinnati, OH, is owned and operated by Bill Hesch, Owner/CEO. His company, founded in 1993, focuses on providing great legal, tax & financial advice (licensed attorney, CPA & Personal Financial Specialist [PFS]) for business owners and high net worth individuals (Estate, Elder Law & Medicaid Planning). Website: www.heschlaw.com
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Affordable Care Act Changes

Under the Affordable Care Act, there are new reporting requirements for the employer to report the cost of coverage under an employer-sponsored group health plan. For years after 2011, employers generally are required to report the cost of health benefits provided on the Form W-2. All employers that provide “applicable employer-sponsored coverage” under a group health plan are subject to the reporting requirement.
Continue reading “Affordable Care Act Changes”