Jeffrey Skolnick’s Post

Payments made by a partnership on behalf of a partner that provides services to the partnership are treated as guaranteed payments. Guaranteed payments are deducted by the partnership and reported as income by the partner on his/her tax return. Guaranteed payments are subject to self-employment tax, thereby satisfying the rule that the individual taking an “above the line” deduction on their personal income tax return has paid social security tax on an amount of income equal to or greater than the medical insurance premiums being deducted. The health insurance policy must be established under the name of the partnership or must be a direct reimbursement to the partner for a premium being paid. If this condition is not met, the partner will not receive an “above the line” deduction. Similar rules apply in the case of HSA payments. The payments for partners that provide services are included as guaranteed payments. If the partner is not providing services, then it is considered a distribution (not deductible by the partnership, not included as income by the recipient. However, keep in mind, since the partnership did not deduct the expense, the partnership income will be higher and lastly, the partner can deduct the HSA contribution on their individual tax return). cpa #accounting #accountant #fiscallyfit #specialist #financial

Payments made by a partnership on behalf of a partner that provides services to the partnership are treated as guaranteed payments. Guaranteed payments are deducted by the partnership and reported as income by the partner on his/her tax return. Guaranteed payments are subject to self-employment tax, thereby satisfying the rule that the individual taking an “above the line” deduction on their personal income tax return has paid social security tax on an amount of income equal to or greater than the medical insurance premiums being deducted. The health insurance policy must be established under the name of the partnership or must be a direct reimbursement to the partner for a premium being paid. If this condition is not met, the partner will not receive an “above the line” deduction. Similar rules apply in the case of HSA payments. The payments for partners that provide services are included as guaranteed payments. If the partner is not providing services, then it is considered a distribution (not deductible by the partnership, not included as income by the recipient. However, keep in mind, since the partnership did not deduct the expense, the partnership income will be higher and lastly, the partner can deduct the HSA contribution on their individual tax return). #cpa #accounting #accountant #fiscallyfit #specialist #financial

Sole proprietors can deduct premiums paid on behalf of themselves, their spouse, dependents, and nondependent children under age 27. The individual must not be eligible to participate in a subsidized plan (one which an employer pays a portion of) from an employer of the individual or their spouse. The sole proprietor must have earned income from their business equal to or greater than the medical insurance being deducted. Once again, the government wants to make sure that in order to allow an “above the line” deduction, social security tax must have been paid on income equal to or greater than the medical insurance premiums being deducted. The policy may be in the name of the business or the individual. As you can see, the type of entity that you operate your business under can have a significant impact on how and when medical insurance premiums are deducted. I caution you here, as I do with many complicated areas of taxation. If you are an owner of a business and you would like to take an above the line deduction, please seek the help of a tax professional familiar with these rules. If you’d like to book an appointment with me, please send me a direct message! #cpa #accounting #accountant #fiscallyfit #specialist #financial #taxes #smallbusiness #finance #smallbusinesslove

Sole proprietors can deduct premiums paid on behalf of themselves, their spouse, dependents and nondependent children under age 27. The individual must not be eligible to participate in a subsidized plan (one which an employer pays a portion of) from an employer of the individual or their spouse. The sole proprietor must have earned income from their business equal to or greater than the medical insurance being deducted. Once again, the government wants to make sure that in order to allow an “above the line” deduction, social security tax must have been paid on income equal to or greater than the medical insurance premiums being deducted. The policy may be in the name of the business or the individual. As you can see, the type of entity that you operate your business under can have a significant impact on how and when medical insurance premiums are deducted. I caution you here, as I do with many complicated areas of taxation. If you are an owner of a business and you would like to take an above the line deduction, please seek the help of a tax professional familiar with these rules. If you’d like to book an appointment with me, please send me a message cpa #accounting #accountant #fiscallyfit #specialist #financial #taxes #smallbusiness #finance #smallbusinesslove

Our July Trust Update is here! The Double Exemption provisions of the Tax Cuts and Jobs Act of 2017 are set to “sunset” on December 31, 2025, which would essentially cut the estate and gift tax exemption in half. This has some people wondering if there might be steps to take today to avoid those future taxes. Also in this issue, a new U.S. Supreme Court decision complicates estate planning for some small businesses. The newly vulnerable ones use company-owned life insurance to provide funding for stock redemptions. You can learn more about both of these topics and more in this month's issue of our Trust UPDATE. Read our July issue by clicking the following link: https://lnkd.in/eVAcZfMx To sign up to receive these monthly newsletters, click here! https://lnkd.in/g4KDif9...

In a recent press release, HMRC addressed some common misconceptions about who needs to file a self-assessment return before the 31 January 2025 deadline and clarifies some of the most widespread myths. The press release seeks to dispel the following myths: Myth 1: “HMRC hasn’t been in touch, so I don’t need to file a tax return.” Reality: It is the individual’s responsibility to determine if they need to complete a tax return for the 2023 to 2024 tax year. There are many reasons why someone might need to register for self-assessment and file a return, including if they: are newly self-employed and have earned gross income over £1,000; earned below £1,000 and wish to pay Class 2 National Insurance Contributions voluntarily to protect their entitlement to State Pension and certain benefits; are a new partner in a business partnership; have received any untaxed income over £2,500; or receive Child Benefit payments and need to pay the High Income Child Benefit Charge because they or their partner earned more than £50,000 (this limit increases to £60,000 for 2024-25). https://lnkd.in/eSKY5YHJ

• What is the limit of the tax deduction for senior citizens under 80D? As per Section 80D of the Income Tax Act, 1961, senior citizens can avail a deduction of up to Rs 50,000 for payment of premium towards a health insurance policy. • What is the tax deduction limit for ordinary citizens under 80D? For those who do not fall under the senior citizens category, the tax deduction limit under Section 80D is Rs 25,000 for payment of premium towards a health insurance policy. • What are the rider covers that qualify for tax benefits? Policyholders can avail tax benefits for riders like Critical Illness cover, Surgical Care Cover, and other health-related ones under Section 80D. • Do I have to pay taxes on the term insurance claim amount? No. Under Section 10 (10D) of the Income Tax Act, 1961, policyholders can avail a tax exemption on the payouts. This means that the death benefit is also covered under this. • Can I claim tax benefits on term insurance even if I have terminated the policy? No. You can’t claim tax benefits if you have terminated the policy. • Can I claim both 80D and 80C? Yes. Section 80C offers deductions up to Rs. 1.5 lakhs per year, while Section 80D offers deductions up to Rs. 75,000 or in case of senior citizen, maximum benefit can be Rs.. 1,00,000 per year. Kainath Sayyed Bashir Sayyed FundzBee Know more about Investment before Investing. #Finance #Financialyear #Tax #Healthinsurance #Termplan #Insurance

As the P11D deadline for the 2023/24 tax year approaches, it's essential to ensure all taxable benefits and expenses paid to your employees or directors are accurately reported. 🔹 Understanding the P11D Form The P11D form must be submitted to HMRC, detailing any taxable benefits or expenses provided to employees or directors during the previous tax year. This includes company cars, health insurance, and other perks. 🔹 Take Action to Avoid Penalties Late or inaccurate submissions can result in significant fines. Ensuring timely and accurate submission is vital to stay compliant and avoid unnecessary penalties. 🔹 Need help with your future P11D submissions? Contact Parsons Chartered Accountants today for expert guidance and support to ensure a smooth and compliant process. #Tax #UKEmployers #P11D #HMRC #Deadline #TaxCompliance #EmployeeBenefits #BusinessTax #Accounting

Reminder to all greater than 2% S-corporation shareholders there is an additional step involved regarding health insurance premiums the company pays on your behalf.   A common error made on W2’s each year is the failure to report the health insurance premiums of a greater than 2% shareholder as wages for income tax withholding purposes on the shareholders W2. Therefore, the premiums are deductible to the S-corporation and taxable to the shareholder as wages.   Generally, the premiums paid are included in box 1 of the shareholders W2 and also reported in box 14. The amount reported in box 14 will then be included on the shareholders personal return as an adjustment to income. The adjustment nets the amount reported as wages on the personal return.    This is a good topic to discuss during year-end tax planning with your tax advisor to assure the proper reporting. W2’s were due in January. Now is a good time to make a note for 2024 to report the premiums paid on your behalf to your payroll company.   Happy tax season!   #realestate #realtors #realestateinvestors #commercialrealestate #ericshadowenslovesrealestate

Did your old law firm pay for egg retrieval, and your company doesn't? Here are a few ideas on how in-house attorney can pay for it and possibly lower your taxes in the process: First, double-check with the benefits/HR folks and just confirm if they'll reimburse you for it (never hurts to just ask). If not, check your health insurance coverage. Some states mandate egg retrieval as part of health coverage, and if you're in that state OR if your health policy is domiciled there, it's possibly covered. Again, ask first just to be sure. If the company and the health insurance won't cover it, unfortunately, it's on you to foot the bill. Ask yourself if you need to pay for it this year or if can you wait a few years. The answer will affect how you save/pay for it. If you need to pay this year and don't have any savings in an FSA or HSA, the IRS will allow you to deduct any medical cost that exceeds 7.5% of your AGI (check line 11 of last year's tax return, and any dollar above that you can deduct on next years taxes - don't forget this!) Just FYI: If your AGI is 200k and your egg retrieval is 15k, that's exactly 7.5%, so there isn't anything to deduct. If the procedure cost 25k, you could deduct 10k (anything above 7.5% AGI). If you have time to save OR just want to lower your taxes as much as possible, contribute the maximum amount allowed to your HSA or FSA from payroll (note, for the FSA you have to spend it that year, so don't fund it if you can't use it in the same calendar year). Each dollar contributed will lower your taxable income (hooray!) Remember... Explore all your available options and choose the most optimized path. There may be obstacles, but you have the power to make this happen. #financialplanning #corporatecounsel #generalcounsel #law