Additional year-end information for small businesses.
Tangible Property Expensing: On November 24, the IRS raised the safe harbor threshold for expensing eligible capital acquisitions from $500 to $2,500. This increase applies to businesses that do not have audited financial statements. The threshold applies to any item that is substantiated by an invoice and is effective for the 2016 tax year. However, use of the new $2,500 threshold by eligible businesses for prior years will not be challenged by the IRS (audit protection).
W-2s: NC has changed the due date for Form W-2 to be filed with the Department of Revenue. The new due date is January 31 which is the same date the forms must be delivered to employees. The reason behind the change is identity theft and its use to file fraudulent returns with refunds being issued.
Worker Classification: In July 2015, the U.S. Department of Labor issued guidance (http://www.dol.gov/whd/workers/misclassification/AI-2015_1.htm) to assist in classifying a worker is an independent contractor or an employee. Improper classification of workers could result in an employer’s liability for unpaid payroll taxes plus interest and penalties. It could also change whether or not the employer was required to provide certain benefits for which penalties could be substantial.