As a result of the recent signing of the Stopgap Highway Bill, mortgage servicers will now be required to meet additional reporting requirements. Currently, mortgage servicers are only required to report to the IRS certain information via Form 1098. Under the new bill, mortgage servicers will now need to report additional information such as:
Amount of outstanding balance
Address of the property
Loan origination d... more
With nonqualified stock options (NQSOs), if the stock appreciates beyond your exercise price, you can buy shares at a price below what they’re trading for. This is the same as for the perhaps better-known incentive stock options (ISOs).
The tax treatment of NQSOs, however, differs from that of ISOs: NQSOs create compensation income — taxed at ordinary-income rates — on the “bargain element” (the difference be... more
Citing challenges for financial statement preparers to implement the new revenue model, the Financial Accounting Standards Board (FASB) announced earlier this month it voted to approve a proposed one-year deferral of the effective date of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers.
Should the proposed ASU be approved, companies would follow the following guidelines related to t... more
A potential downside of tax-deferred saving through a traditional retirement plan is that you’ll have to pay taxes when you make withdrawals at retirement. Roth plans, on the other hand, allow tax-free distributions; the tradeoff is that contributions to these plans don’t reduce your current-year taxable income.
Unfortunately, modified adjusted gross income (MAGI)-based phaseouts may reduce or eliminate your abilit... more
Taxpayers that invest in a trade or business or an activity for the production of income can only deduct losses from the activity or business if the taxpayer is at risk for the investment. A taxpayer is at risk for the amount of cash and the basis of property contributed to the activity. Taxpayers are also at risk for amounts borrowed if the taxpayer is personally liable to pay the liability, or if the taxpayer has pledge... more
With the U.S. Supreme Court’s June 25 decision upholding the Affordable Care Act (ACA) yet again, employers subject to the ACA tax reporting provision can no longer afford to put off planning in the hope that the requirements might go away.
Beginning in 2016, “large” employers as defined by the act (generally employers with 50 or more full-time employees or the equivalent) must file Forms 1094 and 1095 to provide... more
On June 26, the U.S. Supreme Court ruled that same-sex couples have a constitutional right to marry, making same-sex marriage legal in all 50 states. For federal tax purposes, same-sex married couples were already considered married, under the Supreme Court's 2013 decision in United States v. Windsor and subsequent IRS guidance — even if their state of residence didn’t recognize their marriage.
From a tax planning ... more
by Catherine Bruder, Shareholder, Doeren Mayhew
In response to the evolving cybersecurity landscape of financial institutions, the Federal Financial Institutions Examination Council (FFIEC) has released its new cybersecurity assessment tool.
Financial institutions of all asset sizes are expected to use the assessment tool and it’s supporting documents to assess their cybersecurity risk and preparedness. The asse... more
Errors can sometimes occur in the course of administering an employee retirement plan. The IRS’s Employee Plans Compliance Resolution System (EPCRS) offers programs to help employers that sponsor retirement plans correct errors in a timely and cost-effective manner.
Failure to timely correct plan administration errors can cause a plan to lose its tax-favored status. To reduce this risk, the IRS makes EPCRS ... more
If you don’t pay attention to the details, the tax consequences of a sale may be different from what you expect. For example, if you bought the same security at different times and prices and want to sell high-tax-basis shares to reduce gain or increase a loss to offset other gains, be sure to specifically identify which block of shares is being sold.
And when it gets close to year end, keep in mind that the trade da... more