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HLB International Appoints New Member in the Channel Islands

HLB International, one of the leading global accountancy networks with presence in 130 countries, has recently signed a new principal member in The Channel Islands – PraxisIFM.

Established in 1972, with assets under administration exceeding $42 billion, PraxisIFM is an independent, owner-managed, group of companies providing a wide range of bespoke professional services to private individuals, families and international corporate clients.

With a focus on private client services, fund administration, corporate and trade services including cross-border facilitation, asset finance, pensions and treasury operations, its global footprint is producing local synergies with other members in the HLB International network.

“We are delighted to be joining HLB International and see this as an excellent opportunity to develop and grow our business further”, said Brian Morris, Executive Chairman PraxisIFM Group. “We are excited about the significant benefits and additional opportunities available to our clients as we expand globally by being members of HLB International.”

Rob Tautges, HLB International’s Chief Executive commented: “We are very pleased to welcome PraxisIFM to the network. This significant appointment enhances the quality of services and expertise offered by our member firms. It is especially important as HLB strives to build on its successful development of new business opportunities, including international referrals.”

PraxisIFM is headquartered in the Channel Islands and has offices in South Africa, plus seven other locations. The Group has over 250 staff sharing the same passion and commitment to providing a high quality service.

More information on PraxisIFM: www.praxisifm.com

IRS Extends ACA Information Reporting Deadlines

 

On December 28 the IRS published Notice 2016-4 which provides an extension of the due dates for the ACA employer mandate reporting. The due date for furnishing IRS 1095-B or 1095-C to employees has been extended for two months from 2/1/2016 until 3/31/2016. The due date for electronically filing 1094-B or 1094-C data to the IRS has been extended for three months from 3/31/2016 until 6/30/2016.

This extension of deadlines is in response to the IRS’s determination that some employers and insurers still “need additional time to adapt and implement systems and procedures to gather, analyze, and report this information.” While some employees may be affected by this delay, in general, there will be very little impact to employees’ ability to prepare their own taxes. The IRS recently published an online article in which they clearly stated that individuals do not need to have these forms in order to file their taxes.

To learn more about ACA reporting requirements and upcoming deadlines, visit https://www.treasury.gov/press-center/press-releases/Pages/jl316.aspx

2016 Standard Mileage Rates for Business, Medical and Moving Announced

The Internal Revenue Service today issued the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 54 cents per mile for business miles driven, down from 57.5 cents for 2015
  • 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015
  • 14 cents per mile driven in service of charitable organizations

The business mileage rate decreased 3.5 cents per mile and the medical, and moving expense rates decrease 4 cents per mile from the 2015 rates. The charitable rate is based on statute.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

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. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously.

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical or charitable expense are in Rev. Proc. 2010-51.  Notice 2016-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

Smith & Gesteland LLP Joins HLB International as Part of the HLB USA Network

Smith & Gesteland LLP (S&G) joins HLB International as part of the HLB USA Network of independently owned CPA and business advisory firms.

The S&G professional team, headquartered in Madison, Wisconsin, has been serving businesses and individuals in Southern Wisconsin since 1948. The firm provides accounting, audit, tax and consulting services with special expertise in profit enhancement, R&D tax, cost segregation and M&A. They serve clients in Manufacturing/supply chain, construction, high-tech, and non-profit. They have a large practice serving family-owned enterprises.

S&G (an Inside Public Accounting Top 200 firm) adds 18 partners and over 100 staff to HLB’s resources in the US.

This addition further strengthens HLB’s presence in the US. Collectively the HLB USA network has 57 offices served by 458 partners and 2,737 staff.

“The addition of S&G strengthens the US network and broadens the geographic coverage in this important location. We continue to explore growth opportunities with other prospective firms in key markets,” said Richard DeRienzo, Chairman of HLB USA, Inc.

Bill Pellino, Managing Partner of S&G, stated “A crucial part of our on-going development is our firm’s active participation in a major international group. We are delighted to become members of HLB, which complements our existing international service line by providing a strong global dimension to our activities, and helps to raise our profile in key overseas markets as well as our local business community.”

Rob Tautges, HLB’s International Chief Executive stated “This appointment is significant in that the firm is keen to actively develop international connections on behalf of its clients, which strengthens further HLB International’s network.”

S&G has an extensive client base with international business activity and has already referred assignments to HLB members in several regions.

For further information www.sgcpa.com

Put Cadillac Health Plans on Your Road Map

As 2015 nears its end, business owners are naturally looking ahead to 2016. When it comes to your company’s health plan, you might want to peer farther into the future, to 2018. That’s when a steep tax on high-cost health insurance under the Affordable Care Act, dubbed the Cadillac tax, will go into effect.

Although some people have described this tax as an effort to rein in lavish health plans offered to top-bracket taxpayers, that may not paint the entire picture. Studies indicate that anywhere from 15% to 40% of employer-sponsored health plans will be affected when the tax is introduced. In the following years, over half of all health plans could generate this tax.

The Cadillac tax is a 40%, non-deductible charge on costs over specific limits. Ultimately, the tax will be borne by employers, so you should know how it works and what to do about it.

Coverage costs

As the IRS indicated in a pair of 2015 notices, the impact of the Cadillac tax may go beyond basic health plans. Flexible spending arrangements (FSAs), health savings accounts (HSAs), and health reimbursement arrangements (HRAs) also may be included. For the plans coming under this provision of the law, the cost of coverage will be the total contributions paid by both the employer and employees. However, employee-paid deductibles, coinsurance, and copays will not be considered as costs for the Cadillac tax calculation.

The thresholds for high-cost plans are currently $10,200 for individual coverage, and $27,500 for family coverage. These amounts will be updated for 2018 when the tax kicks in, and indexed for inflation after that.

Example: Assume the current thresholds are in effect in 2018. ABC Corp. calculates its costs at $11,000 for individual plans. That would be $800 over the $10,200 threshold, so the 40% tax would be $320 (40% of $800) per covered employee. Various penalties include a 100% fine for miscalculation.

In many cases, the Cadillac tax will be owed by the insurance company providing the plan, but that cost likely would be passed through to the employer.

Cutting back

As might be expected, the Cadillac tax provisions are complex, with multiple definitions and exclusions. Our office can review your current health plans and determine your exposure, if any, to the Cadillac tax.

If your company is vulnerable to the Cadillac tax, what can you do? Options range from paying the tax, in order to keep providing current health care coverage to your employees, to dropping health insurance altogether, subject to Affordable Care Act requirements.

Another, perhaps more common reaction will be to cut health coverage costs and, thus, avoid the Cadillac tax. Employers might do so by changing their plans to include some combination of higher insurance deductibles, smaller provider networks, and more cost sharing by employees. Such moves effectively would shift health care costs from employers to employees; companies might boost employees’ compensation to make up for some of the higher costs—or they might not.

Even with higher pay, though, employees would be losing tax-free health coverage while adding taxable compensation. Such changes could have considerable economic impact on your employees. By starting now to gauge the potential effect of the Cadillac tax in 2018, you can decide what steps you’re likely to take and establish a schedule for introducing any new developments to your workers.

Costly Coverage

  • The “Cadillac” tax is a 40% excise tax on any excess benefit provided to an employee.
  • An excess benefit is the aggregate cost of coverage of the employee for the month over the dollar limit for that month.
  • Each coverage provider must pay the tax on its share of the excess benefit.
  • The coverage provider might be the health insurance issuer, the employer, or the person that administers the plan benefits, depending on the situation.
  • Each employer must calculate for each taxable period the amount subject to the excise tax and the share of the excess benefit for each coverage provider, delivering the appropriate notifications.
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