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Section 179 and Buying asset before the end of 2014.

Currently, the Section 179 expense deduction for purchasing assets in 2014 is limited to $25,000. Many small businesses have used the Section 179 deduction to reduce their tax liabilities before the end of the year. Business owners may ask, what should I do if I need to purchase new equipment, buy it now or wait until January?

Two years ago, Congress extended the Section 179 limits in late December, actually passing the tax bill in January 2013 which was retroactive for all of 2012.

Who knows what will happen in the next five weeks before the end of the year.

If you are contemplating purchasing business assets before the end of the year, I would have everything in place to take delivery and place in service by the end of the year. Hopefully, Congress will take up these expired tax provisions in the next couple of weeks and make it retroactive for 2014. If not, you still get to take the current year regular depreciation deduction.

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Health Insurance Reimbursement Plans

Under the provisions of the Affordable Care Act, employers will no longer be able to offer pre-tax reimbursement to employees for health insurance premiums paid by the employee individually. If an employer offers this benefit to more than one employee, then this violates the Affordable Care Act and will subject the employer to penalties.

If you have this type of arrangement, you will have to treat the premiums paid as taxable compensation in 2014.

Since 1961, the tax law has allowed employers to treat substantiated reimbursements of health insurance premiums as a qualifying tax exempt health insurance fringe benefit. The ACA eliminated this.

Unfortunately, many small businesses have used this provision for years to provide health insurance benefits to their employees at a lower cost that having a group health plan.

Here is the guidance from the IRS in Notice 2013-54 which was released in September:

A. Guidance on HRAs and Certain other Employer Healthcare Arrangements, Health FSAs, and Employee Assistance Programs or EAPs Under the Joint Jurisdiction of the Departments

1. Application of the Market Reform Provisions to HRAs and Certain other Employer Healthcare Arrangements

Question 1: The HRA FAQs provide that an employer-sponsored HRA cannot be integrated with individual market coverage, and, therefore, an HRA used to purchase coverage on the individual market will fail to comply with the annual dollar limit prohibition. May other types of group health plans used to purchase coverage on the individual market be integrated with that individual market coverage for purposes of the annual dollar limit prohibition?

Answer 1: No. A group health plan, including an HRA, used to purchase coverage on the individual market is not integrated with that individual market coverage for purposes of the annual dollar limit prohibition.

For example, a group health plan, such as an employer payment plan, that reimburses employees for an employee’s substantiated individual insurance policy premiums must satisfy the market reforms for group health plans. However the employer payment plan will fail to comply with the annual dollar limit prohibition because (1) an employer payment plan is considered to impose an annual limit up to the cost of the individual market coverage purchased through the arrangement, and (2) an employer payment plan cannot be integrated with any individual health insurance policy purchased under the arrangement.

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2014 Payroll Update

Dear Clients and Friends:

With one year ending and another one beginning, payroll data and files need to be updated. The notices for the 2014 NC unemployment tax rates for businesses are in the process of being mailed. Please remember to update your payroll tax tables for this change after processing the last payroll for 2013.

In 2013, NC made significant changes to the individual income tax rates, exemptions, and deductions. As a result, all employers are required to obtain a new NC-4 or NC-4EZ from each employee by 01/01/2014. You may have already received a mailing from the state in regards to this. Here is a link to the NC Department of Revenue site with additional information and forms – http://www.dor.state.nc.us/press/2013/nc4requirement.html .

Remember that there may be year-end adjustments needed for filing your W-2s. These include, but are not limited to, the following – please contact us if you need assistance in calculating these amounts:
• If you provide a company vehicle to any employee (including company owners), the value of the personal use of the vehicle must be included in the W-2. This is income for federal withholding, FICA, Medicare, and FUTA purposes.

• If you provide group-term life insurance in excess of $50,000 to employees, the value of the life insurance in excess of the $50,000 must be included in the W-2.

• For this and similar non-cash compensation, you obviously cannot withhold tax when there is no cash payment. Therefore, you need to calculate this additional W-2 income before the last payroll of the year, so that you can withhold additional tax from the last payroll, if needed.

• For “S” corporations, the amount the company paid for accident and health insurance (including dental, cancer, long-term care, and other policies) must be included in the W-2 of certain shareholders (those owning more-than-2% of the company, and their spouses, children, and other related parties). The amount paid is taxable for federal withholding purposes, but is not taxable for FICA, FUTA, or Medicare purposes as long as coverage is offered to your employees.

• Note – the Internal Revenue Service has stated its intention to disallow the deduction for health insurance for more-than-2% “S” corporation shareholders if the company fails to include this health insurance in the W-2 of the shareholder.

• Note – 2013 Forms W-2 will include a box to disclose the amount of health insurance paid on behalf of employees. Other than the above adjustment for more-than-2% “S” corporation shareholders, this amount is not taxable income to the employee. This is only an information disclosure. Employers who send 250 or more forms W-2s are required to comply with this disclosure. Other employers, while not required to complete it, should consider doing so in order to show their employees the cost of the coverage paid on their behalf. The amount to report is the total value of group health and major medical plans (use COBRA amounts), self-funded plans, and employer contributions to health FSAs (flexible savings accounts) or HSAs (health savings accounts).

Please contact us if you have any questions.

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International Fraud Awareness Week Nov 3-9, 2013

In an effort to raise awareness of International Awareness Week, our firm would like to provide you with some basic steps that any organization may use to combat fraud.
Please click here for a List of Important Steps.

Courtesy of the Association of Certified Fraud Examiners.

If you have any questions or concerns, please do not hesitate to contact our office.
Firm Partner Sandra A. Miller holds the Certified Fraud Examiner credential.

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Firm sponsors 5K ‘Run to Remember’

Our firm is a proud Awards sponsor of the 5K ‘Run to Remember’ in Historic Kenansville, NC. This race raises funds to assist in providing relief to the patients and programs of the Carolina East Home Care & Hospice, Inc.
The 5K will be held on Saturday November 2, 2013.

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2nd Annual CPA Day of Service

On Friday September 20. 2013, the CPA Day of Service, our staff volunteered at Camp Kirkwood in Watha, NC. We were also joined in this effort by Morrison Hall and Rhonda Coolidge of Pender Memorial Hospital and Clay Blue and Hope Turnbull of Murphy Family Ventures.

We all participated in activities such as cleaning, painting, etc. to beautify the area.

Camp Kirkwood is cared for and operated by The Friends of Camp Kirkwood and the Wilmington Family YMCA.

It is a collaboration of efforts to ensure the continuation of this faith-based and community oriented natural resource exists for future generations to participate in spiritual development and growth.

Camp Kirkwood consists of 195 acres of pristine nature and is just outside of Watha, North Carolina, 5.5 miles north of Burgaw. It is just minutes from Wilmington with easy access to the main thoroughfares to North and South Carolina.

Camp Kirkwood
2015 Camp Kirkwood Rd.
Watha, NC 28478

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IMPORTANT: Notice of a requirement under the Health Care Act- Due by 10/1/2013

One of the requirements under the Affordable Care Act of 2010 is that employees must be notified no later than 10/1/2013, that they have the right to purchase health insurance through the new health insurance exchanges (a/k/a “marketplaces”) on 1/1/2014. This requirement applies to all employers who are subject to the Fair Labor Standards Act. Generally, this means any business with one or more employees with at least $500,000 of annual revenue.

Employers are required to send this notification to all employees, whether or not the employer offers health coverage, and whether or not the specific employee is eligible for coverage. The notice should be mailed to the employee, free of charge. The Regulations do not provide for hand delivery of the notices, so these employers should consider having the employee initial an acknowledgement of receipt.

Future hires should receive a copy of this notice at the time of hire, but no later than 14 days after start date.

Miller & Company, Certified Public Accountants, P.C. recommends that you contact your employee benefits consultant with any questions about this requirement.

The Department of Labor has issued model notices for employers who provide health insurance to any employees and for employers who do not provide health insurance to any employees.

The model notice for employers providing health insurance to employees may be found here.

The model notice for employers who do not provide health insurance to any employees may be found here

These notices may be printed and distributed for this purpose.

Please do not hesitate to contact our office with any questions or concerns.

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