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The 20-20 Vision

20-20 Vision – June 2016

Wow… wait a minute… it’s not June is it?  How can it be almost half way through the year already?!?  But I sure am enjoying all this pool time.  Hopefully all of you are getting a little in, too!  Here is a little information 20-20 hopes you will find useful.  Please let us know if we can answer any questions or help in any way.  We are just an email or call away!  You can reach us at info@20-20accountingsolutions.com or call 205-434-1272 in Birmingham and 256-384-9272 in North Alabama.

2nd Quarter Estimated Payments Are Due!!

Don’t forget that the June 15, 2016 deadline for 2nd quarter estimated payments is fast approaching. Let us know if you need any help!

Tax Tips for Our Armed Forces

Last month we celebrated Memorial Day to honor those who’ve lost their lives in the armed services, but many don’t realize that May 21 was Armed Forces Day, which honors those currently serving, and the entire month of May was National Military Appreciation Month – and with that in mind, the Internal Revenue Service released its annual Armed Forces Tax Guide to help members of the military learn about the many tax benefits available to them.

You can see the full guide, Publication 3, here.  But here are some highlights worth bearing in mind if you are a military family.

  1. Combat pay – Pay received during service in a designated combat zone, qualified hazardous duty area, or certain other qualified areas, is partly or fully tax-free – though it does count as compensation when it comes to figuring out limits on contributions (and deductions of contributions) to IRAs.
  2. Duty-related travel – Reservists whose reserve-related duties take them more than 100 miles from home can deduct their unreimbursed travel expenses on Form 2106 or Form 2106-EZ, even if they don’t itemize their deductions.
  3. Moving expenses – For those on active duty who have to move because of a permanent change of station, unreimbursed moving expenses are deductible on Form 3903. In other cases, they need to meet certain time and distance tests.
  4. Foreign postings – Service members stationed abroad have extra time, until June 15, to file a federal income tax return. Those serving in a combat zone have even longer, typically until 180 days after they leave the combat zone.
  5. Delayed tax payments – Service members may qualify to delay payment of income tax due before or during their period of service by up to 180 days.
  6. The EITC and more – Like similarly situated civilians, low- and moderate-income service members often qualify for such family-friendly tax benefits as the Earned Income Tax Credit, and a special computation method is available depending on whether they elected to include their nontaxable combat pay.
  7. Free filing – Service members who prepare their own return qualify to electronically file their federal return for free using IRS Free File. In addition, the IRS partners with the military through the Volunteer Income Tax Assistance program to provide free tax preparation to service members and their families at bases in the United States and around the world. 

 

If you have any questions about the tax benefits available to our armed forces, don’t hesitate to call!

New Department of Labor Rule Impacting Employers Everywhere

Salaried employees are not always exempt from overtime pay.  A new Department of Labor ruling has brought this to light and will impact many employers.

On December 1st, 2016, all employees making less than $47,476 per year will be eligible for overtime pay for any hours worked over 40 hours per week.  The salary threshold will be updated every three years, based on wage growth over that period of time.

The department of Labor last updated the overtime regulations in 2004, when the minimum threshold was $23,660 per year.

To prepare for the new overtime rules you should:

  1. Review your personnel to determine if your company will be impacted by the new rule.
  2. Determine whether or not impacted employees should be converted to hourly employees or increase salaries.
  3. Communicate the changes to your workforce.

In response, employers can take the following actions:

  1. Pay time and a half for work over 40 hours per week.
  2. Raise salaries above the threshold.
  3. Limit workers to 40 hours per week
  4. A combination of the above.

Some employees are not subject to the salary basis or salary level test, for example doctors, teachers, researchers at educational institutions, and lawyers are not subject to the new overtime rules.

Feel free to call us with any questions on this change.

Tax Due Dates for June 2016

Friday, June 10th

Employees who work for tips – If you received $20 or more in tips during February, report them to your employer.  You can use Form 4070.

Wednesday, June 15th

Individuals living outside the US – File form 1040 or file form 4868 and deposit an estimate for an automatic 4 month extension.

Businesses and individuals who owe estimated taxes – Pay the second installment of your 2016 estimated taxes.

Employers – If the monthly deposit rule applies, deposit the tax for payments in April.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in April.

Monday, June 20th

Alabama Businesses – All state Sales and Use taxes are due.