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33 Cards in this Set
- Front
- Back
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What is an Applicable Large Employer? |
Employed an average of at least 50 full time employees or full time equivalent employees, during the previous calendar year |
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What is a Full Time Employee? |
Employed an average of at least 30 hours per wk for a calendar month |
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Employer Shared Responsibility Penalty - DOES offer MEC to 95% of FTE |
$3,000 per FTE who receives the Premium Tax Credit |
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Employer Shared Responsibility Penalty - DOES NOT offer MEC to 95% of FTE |
$2,000 per FTE for all employees (exclude the first 30 employees from the calculation) |
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What is the ACA employer Annual Reporting Requirement? |
File 1094-C and 1095-C by February 28th (March 31st if filing electronically) |
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Business Startup and Organizational Costs - Howmuch start-up and organizational costs may deducted as an expense in thecurrent year? |
$5,000 |
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Business Startup and Organizational Costs - Whencosts exceed what amount do you decrease the deduction in each category? |
Reduce the deduction by the amount of costs thatexceed $50,000 |
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Business Startup and Organizational Costs - Howdoes the taxpayer treat the remaining costs? |
Amortizeany remaining costs over a 180 month period beginning with the initial month ofoperation |
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When can you deduct rent as an expense?
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Only if the rent is for the use of property inthe taxpayer’s business> |
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Can you deduct rent for a home office?
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Maybe able to deduct the rent paid for that part |
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Expenses on Leased Property-
Are lease payments considered rent? |
Yes |
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Expenses on Leased Property- how do you treat costs to acquire the lease? |
Amortize
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Interest Expense-
What interest is deductible? |
Allinterest paid or accrued during the year on debts related to his business |
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Interest Expense-
What interest must be capitalized? |
a. Interest on debt to produce real property orcertain tangible personal property: i. Real property ii. Tangible personal property – class life of 20yrs or more iii. Tangible personal property – estimatedproduction period more than 2 yrs iv. Tangible personal property – estimatedproduction period more than one year ifthe estimated cost of production is morethan $1 million |
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What insurance premiums are deductible?
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a. Insurance related to a business – fire, storm,theft, accident, similar losses b. Credit insurance to cover losses from bad debts c. Group hospitalization and medical insurancefor employees, including long-term care insurance d. Liabilityinsurance e. Malpractice f. Worker’s comp set by law g. Contributionsto state unemployment insurance fund h. Lifeinsurance i. Car and other vehicle insurance that coversvehicles used in business j. Business interruption insurance for lostprofits if the business closes due to a fire or other cause |
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What 4 types of insurance premiums are not deductible?
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a. Self -insurance reserve funds b. Premiums for a policy that pays for lostearnings due to sickness or disability c. Certain life insurance and annuities d. Insurance to secure a loan |
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Who qualifies for the self-employed health insurance deduction?
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a. Care is for TP, spouse, or dependents, AND i. Self-employed individual with a net profit reported on Schedule C,Schedule C-EZ, or Schedule F(farming); OR ii. Partnerwith net earnings from self-employmenton Schedule K-1(1065); OR iii. Shareholder owning more than 2% of the outstanding stock of an S Corp with wages fromthe corp reported on Form W-2 |
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What amount of unreimbursed entertainment expenses is deductible?
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50% |
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What are the 2 main tests to deduct entertainment expenses?
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a. Ordinaryand necessary; AND 1 of the following: i. Directly-relatedtest:AssociatedTest: |
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Casualty and Theft (business and income producing property)- How is the loss figured? |
a. Adjusted Basis – salvage value,insurance, and other reimbursements |
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Casualty and Theft (business and income producing property)- Where the 2 methods to determine loss of inventory? |
a. Take the loss as an increase in COGSb. Deduct the loss separately |
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Casualty and Theft (business and income producing property)- Are these losses subject to AGI limits? |
No |
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Business Bad Debts-
can a cash basis taxpayer claimed a business bad debt? |
no |
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Business Bad Debts- What are the conditions for claiming a business bad debt for an accrual taxpayer? |
Previouslyincluded in income (usually as a credit sale) |
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Recovery of a Bad Debt-
were to include? |
"other income" |
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Credit For Small Employer Pension Plan Start-up Costs: a. %? b. Maximum? c. First year you can deduct costs? |
a. 50% b. $500 per year for the first 3 years of the plan c. Tax year prior to the tax year in which the plan becomes effective |
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Credit for Employer-provided Childcare: a. % b. credit limit |
a. 25% of the qualified childcare facility expenditures + 10% of the qualified childcare resource and referral expenditures b. $150,000 per yer |
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Credit for Increasing Research Activities: a. % |
20% of the increase in research activities
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Disabled Access Credit: a. % |
50% of the first $10,000
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Alternative Motor Vehicle Credit: a. type of vehicle? |
NEW
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Investment Credit: a. total of which 5 credits? |
a. Rehabilitation credit (10% for pre-1936; 20% if a certified historical structure) b. Energy Credit c. Qualifying advanced energy project credits d. qualifying advanced coal project e. qualifying gasification project |
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Work Opportunity Credit: a. which year wages? b. maximum amount of wages? c. % |
c. 25% of qualified first-year wages of employees working more than 120 but less than 400 hours in the year ; PLUS 40% of qualified first-year wages for employees working more than 400 hours in the year; PLUS 50% of qualified second year employees certified as long-term family assistance recipients |
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General Business Credits - limit on reduction in tax liability?
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NEVER below: tentative minimum tax OR 25% of regular tax in excess of $25,000 (GREATER) Unused credit may be carried back 1 year or forward 20 years |
