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More Time for Some ACA Reporting

Published on December 22, 2016

The IRS has extended the 2017 due date for employers and coverage providers to furnish information statements to individuals – but the due date for filing with the IRS has not been extended. 

IRS Notice 2016-70 explained the upcoming 2017 reporting due dates:

Applicable large employers, including those that are self-insured, must send Forms 1095-C to full-time employees by March 2; and must file Forms 1095-C and 1094-C with the IRS by Feb. 28 for paper and March 31 for e-filing. (Applicable large employers that provide employer-sponsored self-insured health coverage to non-employees may use either 1095-B or 1095-C to report coverage for those individuals and other family members.) 

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Employers: Accelerated Filing Deadlines for W-2s and 1099s in 2017

Published on December 22, 2016

One of the provisions in the Protecting Americans From Tax Hikes Act of 2015 (PATH Act) was to accelerate the filing deadline for Form W-2 and Form 1099-MISC. The new due dates take effect for the 2016 forms, which are due in 2017. 

The provision is aimed at reducing refund fraud connected to the reporting of employee and non-employee compensation through information returns like the W-2 and 1099. Thieves have been attempting to file fraudulent returns early in the tax season to claim refunds before the IRS has received and verified the data from employers. The new accelerated timeline will get the employer information to the IRS sooner, thereby helping to limit the opportunity thieves have to file fraudulent returns.

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Judge Blocks Obama Rule Extending Overtime Pay to 4.2 Million U.S. Workers

Published on December 22, 2016

A federal judge blocked an Obama administration rule to extend mandatory overtime pay to more than 4 million salaried workers from taking effect, imperiling one of the outgoing president's signature achievements for boosting wages. 

U.S. District Judge Amos Mazzant, in Sherman, Texas, agreed with 21 states and a coalition of business groups, including the U.S. Chamber of Commerce, that the rule is unlawful and granted their motion for a nationwide injunction. 

The rule, issued by the Labor Department, was to take effect Dec. 1 and would have doubled to $47,500 the maximum salary a worker can earn and still be eligible for mandatory overtime pay. The new threshold would have been the first significant change in four decades. 

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IRS lowers mileage rates for 2017

Published on December 22, 2016

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

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

• 53.5 cents per mile for business miles driven, down from 54 cents for 2016;

• 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016;

• 14 cents per mile driven in service of charitable organizations.

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The Best Kept Secrets of Fraud, Part I

Published on November 28, 2016

Deep in the heart of a steaming jungle, a ramshackle mining town is full of dangers like mudslides, snakebites, and tropical diseases. Even getting here is an adventure that requires a small plane, a day spent navigating seething rivers, or a hair-raising 4x4 ride over ungraded roads. There are few comforts here and, apart from items in a small camp commissary, almost nothing to buy.

It may seem the most unlikely place on earth to uncover an elaborate fraud scheme. But as Mary Breslin, CIA, CFE, discovered, “The accounting team had this fantastic, controlled, double sign-off process for the miners’ cash. It was placed in envelopes, which were actually sealed with wax, and then hand-delivered to each person, who had to count and sign for it.” Just one problem — the same payroll agent who prepared the miners’ checks was also entrusted with making the bank run to withdraw their cash. It was easy enough to add extra money to each check, pick up the cash, and pocket the difference.

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FASB Proposes Targeted Changes to Hedge Accounting Rules

Published on November 28, 2016

FASB aims to ensure that financial statements provide faithful depictions of the economic results of an organization's risk management activities.
To achieve that goal, the board has proposed the following targeted changes to hedge accounting standards:

• Expanding the use of component hedging for nonfinancial and financial risks.

• Refining the measurement techniques for hedged items in fair value hedges of benchmark interest rate risk.

• Eliminating the separate measurement and reporting of hedge ineffectiveness.

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Anticipating Questions about the New Overtime Rule

Published on November 28, 2016

The Department of Labor released the highly anticipated final overtime rule in May, expanding overtime pay eligibility to approximately 4.2 million salaried workers across the country.

Despite recent news that a lawsuit has been filed by 21 states as well as a separate lawsuit filed by business groups led by the U.S. Chamber of Commerce both challenging the rule, businesses are urged to continue with preparation efforts for the Dec. 1, 2016 effective date.

Despite the fact that the updates are expected to have a significant impact on businesses, a recent Paychex Small Business Snapshot showed that nearly half of all business owners (49 percent) claimed they were unaware of the final overtime rule altogether. Additionally, of those who were aware, 67 percent said it will have little or no impact on their business, perhaps underscoring a lack of knowledge about the potential implications of the rule.

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Avoiding the Doomsday Countdown: How Companies Can Prepare for Changes in Revenue Recognition

Published on November 28, 2016

The countdown is on for 2018, as new international accounting rules, IFRS 15 for international countries and ASC 606 for the U.S., will change the way companies need to manage revenue recognition.

While 2018 seems far away, a recent survey by PwC and the Financial Education Research Foundation found that 75 percent of companies haven’t completed an initial assessment of the standard’s effect, and nearly 27 percent of respondents haven’t started the assessment process. This is a huge problem because it takes the average Fortune 1000 company 18 months to get ready for a change of this magnitude—a milestone that just eclipsed us in June.

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IRS issues 2017 inflation adjustments for many tax provisions

Published on November 28, 2016

The IRS issued the annual inflation adjustments for 2017 for more than 50 tax provisions as well as the 2017 tax rate tables for individuals and estates and trusts (Rev. Proc. 2016-55). These provisions are used to file tax year 2017 returns in 2018.

One of the few inflation-adjusted amounts that stayed the same is the personal exemption, which remains $4,050 for 2017. The standard deduction for married taxpayers filing joint returns increases slightly to $12,700, $100 more than in 2015 and 2016. It also increases slightly for single taxpayers and married taxpayers filing separately to $6,350. The standard deduction increases for heads of household, from $9,300 to $9,350.

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2017 Pension Plan Limitations Announced

Published on November 28, 2016

The IRS has released cost-of-living adjustments for the dollar limitations for pension plan contributions and other retirement-related items for tax year 2017.

The contribution limit for 401(k)s remains unchanged, at $18,000 for 2017. However, income ranges for eligibility to make deductible contributions to traditional IRAs and to Roth IRAs, and to claim the saver’s credit, all increased.

The phase-out ranges for when taxpayers or their spouses who were covered by a retirement plan at work were also changed for 2017:

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