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2017 Tax Reform: Key differences between the Senate and House tax bills

The Senate and the House have each passed their own version of the "Tax Cuts and Jobs Act." The two versions of the bill have many similar provisions, but they also have a number of key differences that will have to be reconciled by the Conference Committee as the two bills are merged into a single piece of legislation. It is unclear at this point how these differences will be resolved. However, there is generally an inclination that the Senate's provisions carry somewhat more weight because, since the Senate is subject to budgetary restraints as part of the reconciliation process, there...

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IRS Increases Limits for HSA, FSA, HDHP

The IRS recently announced cost-of-living adjustments to the annual dollar limits for various welfare and retirement plan limits for 2018. Although some of the limits will remain the same, many of the limits will increase for 2018. The annual limits for the following commonly offered employee benefits will increase for 2018: High deductible health plans (HDHPs) and health savings accounts (HSAs); Health flexible spending accounts (FSAs); Transportation fringe benefit plans; and 401(k) plans Employers should update their benefit plan designs for the new limits and also make sure that their plan administration will be consistent with the new limits in 2018. Employers may also want to...

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IRS Updates Retirement Contribution Limits for 2018

Section 415(d) of the Internal Revenue Code requires that the Commissioner annually examine the dollar limitations on benefits and contributions under qualified retirement plans for cost-of-living increases. Please reference the charts below with the updated IRS limits for 2018. IRS Cost-of-Living Adjustments for 2017 – 2018 IRS Limit 2018 2017 401(k), SARSEP & 403(b) Plan Deferral Limits $18,500 / $6,000* Catch-up $18,000 / $6,000 Catch-up 457 Plan Deferral Limit $18,500 / $6,000* Catch-up $18,000 / $6,000 Catch-up SIMPLE IRA Plan Deferral Limits $12,500* / $3,000* Catch-up $12,500 / $3,000 Catch-up Defined Contribution Dollar Limit $55,000 $54,000 Defined Benefit Dollar Limit $220,000 $215,000 Section 401(a)(17) Compensation Limit $275,000 $270,000 Highly Compensated Employee Compensation $120,000* $120,000 Key Employee Officer Compensation $175,000* $175,000 *Unchanged from 2017 limits. Social Security Cost-of-Living Adjustments for 2017...

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PROPOSED House bill features many business tax changes

*** Below is an article from The Journal of Accountancy published by the AICPA.  SIMA encourages clients to learn about the proposed bill but to note that no laws have changed at this time.  SIMA will continue to keep clients abreast of tax reform as proposed legislation moves through Congress. At an estimated projected revenue cost over 10 years of $1.46 trillion, the reduction of the corporate income tax rate in the Tax Cuts and Jobs Act, H.R. 1, is the bill's largest single item by forecast negative effect to the federal budget, according to the Joint Committee on Taxation's...

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Avoid a Sexual Harassment Claim

Despite decades of attention in the media and courts, new spotlights on systemic sexual harassment highlight a significant and costly problem in today's business environment. According to the U.S. Equal Employment Opportunity Commission, since 2010, more than 7,000 sexual harassment charges have been filed with the agency each year.  What is Sexual Harassment? Sexual harassment is a form of unlawful sex discrimination that can occur in a variety of circumstances. Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when this conduct: Explicitly or implicitly affects an individual's employment; Unreasonably interferes with...

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401(k) Contribution Limit Increases to $18,500

The IRS has announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2018. Highlights include: The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), and most 457 plans is increased from $18,000 to $18,500. The catch-up contribution limit for those aged 50 and over remains unchanged at $6,000. The limit on annual contributions to an individual retirement arrangement (IRA) remains unchanged at $5,500. The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have adjusted gross...

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IRS Releases New Guidance on QSEHRAs

Notice & Other Requirements Clarified The Internal Revenue Service (IRS) has released guidance further clarifying the rules regulating qualified small employer health reimbursement arrangements (QSEHRAs). QSEHRAs—which are health reimbursement arrangements exempt from the Affordable Care Act's market reforms—may be offered by employers with fewer than 50 full-time equivalent employees that do not offer a group health plan to any of its employees to reimburse employees for medical expenses, including individual health insurance policy premiums. Highlights of the guidance are described below. Guidance Highlights Written Notice Deadline: An employer that provides a QSEHRA during 2017 or 2018 must generally furnish its initial written notice...

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IRS Highlights 7 Resources for Small Businesses

The Internal Revenue Service is reminding small business owners of the following helpful resources: The Small Business and Self-Employed Tax Center contains information for small businesses with assets under $10 million. The IRS Tax Calendar for Businesses and Self-Employed includes monthly tax due dates and actions. Users can subscribe to calendar reminders or import the calendar to their desktop or mobile device. The A-to-Z Index for Business is a tool for finding topics on IRS.gov. E-News for Small Businesses gives information on deadlines, emerging issues, tips, news, and more. The IRS Video Portal offers learning events and videos on business topics. The Small Business Forms and...

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First Big Step Toward Tax Reform

The House on Thursday passed a $1.1 trillion budget, formally initiating a process that Republicans hope will result in the enactment of major tax reform later this year. The final tally was close, with 219 votes in favor, and 206 in opposition to the resolution. More than a dozen Republicans voted with Democrats against the budget, because they objected to elements of the spending package, or to parts of the tax reform proposal. The Senate Budget Committee was expected to pass a similar budget later in the day, with a vote in the full Senate slated for the week of Oct. 16. By...

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Critical connection: How costs impact pricing

As we head toward year end, your company may be reviewing its business strategy for 2017 or devising plans for 2018. As you do so, be sure to give some attention to the prices you’re asking for your existing products and services, as well as those you plan to launch in the near future. The cost of production is a logical starting point. After all, if your prices don’t exceed costs over the long run, your business will fail. This critical connection demands regular re-evaluation. Reconsider everything One simple way to assess costs is to apply a desired “markup” percentage to your expected...

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