2013 has some tax law changes which should help small businesses, particularly those in the real estate industry. Under the new law, real property improvements up to $250,000 can be expensed in one year, whereas in he past, these amounts had to be capitalized and written off over a period up to as high as 39 years

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Recently the IRS rules that couples who are legally married in a jurisdiction that recognizes their marriage will be treated as married for federal tax purposes. This ruling not only applies to personal income taxes but to estate and gift tax as well. Thus same sex couples who are legally married will enjoy the benefits of enhanced standard deductions, spousal IRA, and child tax credits.

Many business owners do not have any plan for transferring ownership of their small business to their heirs. The owner of the business must consider his children’s desire to be in the family business versus one who does not.
Aside from the issue of how to be fair and equitable to your children, business owners should take advantage of various gift strategies to minimize taxes upon transfer of the business. This is especially true with values in excess of $10,500,000 (the amount which can be excluded from gift tax for federal gift tax pup roses if your spouse agrees to split the gift)

Public work projects through state agency contracts dictate the minimum amount of wages and related fringe benefits which must be paid for various type s of construction work. Not only do these regulations state the minimum hourly wage, but also regulate the maximum number of hours of weekly work.

Both contractors and subcontractors are required to make wage schedules available at the construction site so that employees have access to them. The contracting agency will require both the contractor and or subcontractor to submit original payroll records which show the employees name, hours worked per day and the rate of pay.It is important that the contractor maintain records such as time sheets, cancelled checks etc.

If the department of labor audits your payroll because of an investigation, not only will underpaid wages have to be paid but penalties of up to 25% of the underpaid wages may be imposed as well. This is in addition to losing the contact and be barred from participating in future contracts.

It is thus imperative that contractors and subcontractors implement and maintain accurate record keeping to comply with the labor laws

Spending less than 184 days in new York does not mean you are no longer taxes as a new York State resident. A taxpayer with multiple residences must pay attention to various factors which the State of new York uses to determine a taxpayer’s intent for state of residence. Things which will help determine a taxpayer’s intent are as follows:

1) Voter registration
2) new drivers license
3) Registration of vehicles

New York State uses factors such as the relative size and value of multiple homes, business affiliations within the state, and the amount of time spent in a given location to determine one’s intent for residency determination.

Regardless of whether or not a taxpayer is a resident or not, taxes must always be paid at the source of the income (i.e. Rental property or partnership income).

Thus, a taxpayer can face some difficulty when changing residences for state tax purposes. Proper planning in crucial so that one may benefit from being domiciled in a state that has little or no income tax.

Beginning in 2014, the Patient Protection and Affordable Care Act of 2010 (“Obamacare”) will impose new health care coverage requirements, called “shared responsibility”, on certain large employers. A large employer is defined as an employer with at least 50 full-time, or ‘‘full-time equivalent” employees during the previous year.
Who is considered a full-time employee?
• A person who averages at least 30 hours of service per week.
• A person who averages at least 130 hours of service per calendar month.
• Two or more persons who are not full-time employees are aggregated to create “full-time equivalent” employees. Each multiple of 120 hours of service per month equals one full-time equivalent employee. Example: 20 persons each work 15 hours per week, which is 60 hours per month. The law views this as 10 full-time employees.
Is anyone else included?
All employees that are within an employer’s ‘‘controlled group” (companies with related ownership) are aggregated. Thus, two or more smaller entities under common control can be considered one entity with over
50 employees.
• Independent contractors can be considered employees for this purpose if subject to the will and control of the employer with regard to what work shall be done, when and how.

New York State Department of Taxation and Finance recently issued an advisory opinion concerning the installation, rental, and dismantling of temporary pedestrian walkways for use with capital improvements when the price charged is a lump sum for all services and the rental.

If the scaffolding is a “temporary facility” at a construction site that is a necessary prerequisite to the construction of a capital improvement to real property, the lump sum of the rental and services would not be taxable. It the rental of the sidewalk bridge is separately charged, that charge would be subject to sales tax as a rental of tangible property.

The purchase of equipment or components of the scaffolding by the scaffolding company are subject to sales or use tax tax because such purchases are subject to purchase for resale.

Recently companies like Apple and Google have come under fire for large scale tax avoidance. For starters tax avoidance is perfectly legal. Why shouldn’t a corporation or an individual for that matter utilize all legal methods to minimize taxes?

If the tax authorities are not satisfied with the amount of money they receive, either change the law to prevent utilizing these tax saving strategies or lower rates to collect more money in total. United States corporate tax rates are higher than many other countries, accordingly, corporations will try to find legal ways to allocate profit to where it is taxed less.

Perhaps Congress can learn from the companies, instead of bad mouthing them, and make meaningful changes to encourage more allocation of taxable income in the United States. Thus every body benefits.

Prior to the passage of Obamacare, taxpayers were not required to pay Medicare tax on investment income. The recent passage of the Affordable Care Act has changed all that. As of January 1, 2013 taxpayer are required to pay a 3.8% tax on investment income if modified adjusted gross income exceeds $250,000 for married taxpayers filing joint returns and $125,000 for married taxpayers filing separately.If a taxpayer is single the amount is $200,000.

Interest and dividend income in addition to gain from the disposition of property is subject to this additional tax.

Spending less than 184 days in new York does not mean you are no longer taxes as a new York State resident. A taxpayer with multiple residences must pay attention to various factors which the State of new York uses to determine a taxpayer’s intent for state of residence. Things which will help determine a taxpayer’s intent are as follows:

1) Voter registration
2) new drivers license
3) Registration of vehicles

New York State uses factors such as the relative size and value of multiple homes, business affiliations within the state, and the amount of time spent in a given location to determine one’s intent for residency determination.

Regardless of whether or not a taxpayer is a resident or not, taxes must always be paid at the source of the income (i.e. Rental property or partnership income).

Thus, a taxpayer can face some difficulty when changing residences for state tax purposes. Proper planning in crucial so that one may benefit from being domiciled in a state that has little or no income tax.