Employer Health Insurance Rules Eased for 2015
Aug 27, 2014
Health insurance remains a big focus for employers of all sizes as the Affordable Care Act’s provisions are gradually implemented. Starting next year, certain employers will have to offer their full-time employees “affordable” health coverage that provides “minimum value” or pay a penalty if at least one full-time employee enrolls in marketplace coverage and receives a premium tax credit (basically a subsidy for buying the insurance).
The employer shared responsibility rules are applicable only to “large” employers — generally defined in the law as employers that employed on average at least 50 full-time or full-time equivalent employees on business days during the prior calendar year. An employee is a full-time employee for a calendar month if the employee averages at least 30 hours of service per week, and 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week.
Although the employer shared responsibility rules become effective in 2015, the IRS recently offered certain transition relief for 2015:
Employers with 50-99 full-time employees. No employer shared responsibility payment will apply during 2015 if an employer has at least 50 but fewer than 100 full-time employees (including full-time equivalents) on business days during 2014 if certain conditions are met. The basic conditions: During the period from February 9, 2014, through December 14, 2014, the employer must not (1) reduce the size of its work force and overall hours of service of its employees in order to qualify for the relief or (2) eliminate or materially reduce the health coverage, if any, it offered as of February 9, 2014.
Counting full-time employees. Employers can determine whether they had at least 100 full-time or full-time equivalent employees in the prior year by reference to a period of at least six consecutive months instead of a full year.
Coverage. Employers that are subject to the employer shared responsibility provisions in 2015 must offer coverage to at least 70% of full-time employees, rather than 95%, as one of the conditions for avoiding shared responsibility payments. Additionally, the policy that employers offer coverage to their full-time employees’ dependents will not apply in 2015 to employers that are taking steps to arrange for dependent coverage to begin in 2016.
Categories: Healthcare & Dentistry
Rental of Vacation Homes
Aug 14, 2014
If you rent a home to others, you usually have to report the rental income on your tax return. But you may not have to report the income if the rental period is short and you also use the property as your home. In most cases, you can deduct the costs of renting your property. However, your deduction may be limited if you also use the property as your home.
Here is some basic tax information that you should know if you rent out a vacation home:
Vacation Home – A vacation home can be a house, apartment, condominium, mobile home, boat or similar property.
Schedule E – You usually report rental income and rental expenses on Schedule E, Supplemental Income and Loss. Your rental income may also be subject to Net investment income tax.
Used as a home – If the property is “used as a home,” your rental expense deduction is limited. This means your deduction for rental expenses can’t be more than the rent you received.
Divide expenses – If you personally use your property and also rent it to others, special rules apply. You must divide your expenses between the rental use and the personal use.
Personal use – Personal use may include use by your family. It may also include use by any other property owners or their family. Use by anyone who pays less than a fair rental price is also personal use.
Schedule A – Report deductible expenses for personal use on Schedule A, Itemized Deductions. These may include costs such as mortgage interest, property taxes and casualty losses.
Rented Less than 15 days – If the property is “used as a home” and you rent it out fewer than 15 days per year, you do not have to report the rental income.
By: Diane Allman, CPA
Categories: Healthcare & Dentistry
Dental Financial Wellbeing
Aug 06, 2014
Are you a dentist just out of dental school with a practice to run and you’re not prepared for the business aspects? You might be making financial mistakes every day and not even know it. You could have major financial problems coming your way and won’t know it until it’s too late.
Across the country dentists are struggling. The percentage of dentists who describe themselves as “not busy enough” is increasing all because of a growing supply of working dentists and shrinking demand. If you find yourself with more time than patients, you could be in trouble. With dental care among adults decreasing and the continuing changes in dental insurance, it’s harder and more important than ever to get control of your finances.
Financial decisions – For some dentists, every financial decision causes panic, even the routine ones. If you don’t have sufficient cash flow, you won’t have the money to confidently spend on the things you need to grow your practice. Some of this can come from poor management of overhead. As a percentage of your revenue, you should be running your practice at about 55% to 60% overhead. Anything higher than 60% can mean you are heading for disaster.
Debt – If you’re afraid of debt, this can only make the problem worse. When you try to pay cash for everything, it means you don’t have cash things that come up, and this puts you in a position where your problems feed one another and send your finances into oblivion.
Retirement – Poor cash flow also leads to poor long-term savings, which can delay and dramatically reduce the quality of your retirement. If your money is sunk into overhead costs and tax bills, you won’t be able to adequately save for retirement. To maintain your current lifestyle after retirement, you need to manage your money intelligently today.
Are you spending more time managing your practice than seeing patients? If so, you need help, before it’s too late. Seek financial guidance now, and get your practice back on track.
Categories: Healthcare & Dentistry
Attracting & Keeping Patient Requires Repetitive Contacts
Jul 17, 2014
The demands of operating a dental practice never leave enough time to strengthen important relationships and reinforce your value. Landing new patients and retaining current ones requires continual nurturing.
When a farmer grows crops, much time and tender loving care are required to ensure a successful harvest. When you reach out to potential patients, it is unreasonable to expect that they are going to stop going to the competition and move to your practice. Patients who have specific needs that are not being met are like low hanging fruit — they are ripe for picking. In addition, existing patients also require some nurturing.
Trickle Marketing A solution to these dilemmas is to establish a “trickle marketing” campaign for your patients and prospects. Getting in front of your market in a repetitive, yet strategic fashion can lend hand to a change in their dental practice.
This involves sending regular material to maintain a presence. In some cases, this material doesn’t have to be overtly promotional – it can merely educate patients with useful information and demonstrate your professional competence. By doing so, it keeps your practice in the minds of prospects and patients. You are nurturing the relationship the way the farmer cultivates fruit.
Many dental practice send newsletters, tips, article reprints or brochures to their targeted audience. These devices are all useful. The problem is that most practices don’t send this material out frequently enough.
Think of your personal response to direct mail. In many cases, you pitch it in the trash without opening it, especially if you are busy. The pieces you open and notice are probably the ones that were sent multiple times. There is so much mail clutter, that it can take dozens of exposures for your material to gain recognition.
For the typical dental practice, this poses a dilemma. The high cost of printing and mailing marketing material can make repetitive contacts too costly. As a result, your patients and prospects are not getting sufficient touches throughout the year.
Solution: Augment your mailings with an e-mail marketing campaign. The costs are significantly lower when you send your material out via e-mail (see right-hand box for e-mail tips).
The key to staying in front of your current patients and developing prospects is frequency and value. Instituting a trickle marketing campaign for your company can help achieve these goals.
Categories: Healthcare & Dentistry
Foreign Bank Accounts and Other Foreign Financial Assets
Jul 11, 2014
You must report worldwide income on your US income tax return. If you have an “interest in” a foreign bank or financial account you must check “yes” on Schedule B of your tax return. You may also have to file Form 8938 with your return to report foreign accounts and assets. Additionally, you may have to file an FBAR (114) report separate from your income tax return each year.
The Foreign Account Tax Compliance Act (FATCA) brings us more global bank transparency, and aims to discourage offshore tax evasion. FATCA brings with it large civil penalties and possible criminal sanctions, thus enticing taxpayers to be more forthcoming in reporting their non-US income and assets.
U.S. persons holding any financial interest in, or signature or other authority over, a bank, securities, or other financial account in a foreign country are required to report the account to the US government if the value of the account(s) exceed(s) $10,000. This is done on a Report of Foreign Bank and Financial Accounts (FBAR, now 114). Since 2003 the IRS has had the task of enforcing the required FBAR (114) filing and assessing the harsh penalties for non-compliance. Currently penalties are $10,000 per account that goes unreported, and $100,000 or 50% of the account’s value for willfull failures to report.
Form 8938, Statement of Specified Foreign Financial Assets, may also be required to report foreign accounts and assets such as:
• Financial accounts maintained at foreign financial institutions • Foreign retirement accounts • Direct ownership of stock in a foreign corporation (outside of a financial institution) • Foreign life insurance products • Foreign partnership interests, such as foreign hedge funds and foreign private equity funds • Foreign deferred compensation arrangements • Beneficial interests in foreign trusts or estates
The reporting requirement for Form 8938 has various thresholds with a minimum reporting threshold of $50,000. Similar to the FBAR (114), there are significant penalties for failure to file Form 8938.
Every year, careful consideration needs to be made to determine if foreign reporting requirements affect you. Please keep these factors in mind throughout the year in order to be fully compliant once tax reporting time is upon us.
Categories: Healthcare & Dentistry