|Here’s some new information for business taxpayers in the 2015 tax year:
W-2 Reporting of Employer Health Costs
The Affordable Care Act (ACA) requires certain employers to report the cost of coverage under employer-sponsored group health plans. This reporting is done on W-2 forms. Reporting the cost of health care coverage on Form W-2 doesn’t mean it is taxable. The reporting is for informational purposes only to help employees understand the cost of their coverage.
Currently, this reporting is optional for employers that submit fewer than 250 W-2 forms. But it’s mandatory for employers that submit 250 or more W-2 forms. Compliance requires employers to supply the appropriate reporting codes, which flow to the required W-2 reporting boxes. To further complicate matters, certain types of coverage (such as major medical) currently must be reported, while other types are optional or don’t need to be reported.
W-2 forms must be distributed to employees by February 1, 2016. But gathering the requisite information will be time consuming for most companies. Fortunately, your tax and accounting advisers can assist with W-2 reporting of employer health costs. Be sure to contact them as soon as possible if you need help.
Year-end tax planning for 2015 is particularly challenging because Congress has yet to act on a host of tax breaks that expired at the end of 2014. It’s uncertain at this time whether the “extender” provisions will be extended by Congress on a permanent or temporary basis (and whether any such extension would be made retroactive to January 1, 2015). For businesses, these tax breaks include:
1. 50% bonus first-year depreciation for most new machinery, equipment and software,
2. An expanded annual expensing limitation under Section 179 (up to $500,000 for 2014),
3. The research tax credit, and
4. The 15-year write-off for qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property.
Discuss the status of these extenders with your tax adviser before year end.
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