Verify First Act Created to Deter Ineligible Recipients

Verify First Act Created to Deter Ineligible Recipients

The Advance Premium Tax Credit allows for United States taxpayers to take a tax credit in advance to lower their monthly health insurance premiums. As of June 13th, 2017 Congress has passed the “Verify First Act” which will now require the taxpayer to be verified as a U.S. resident, national, or lawfully legal alien to take the advanced payment. This act was created to deter what the White House administration states costs multi-millions of taxpayer funded assistance to ineligible beneficiaries.

As a result of this act the Federal government will begin utilizing lawful means of confirming a taxpayer’s citizenship or status prior to utilization of this credit. One of the more simplistic methods may be to verify a taxpayer’s Social Security number. We urge all taxpayers to verify citizenship or legal status prior to applying for the Advance Premium Tax Credit in order to receive the necessary funding

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

Employee vs Independent Contractor: Understanding the Difference

Employee vs Independent Contractor Understadning the Difference

Whether you are an employer who is looking to hire workers for your business or an employee who just got hired, understanding the difference between an employee and an independent contractor can help you to avoid significant tax and legal liabilities.

Usually it is up to the hiring company to determine whether the individual hired is an employee or an independent contractor. Often for companies it is easier to hire an independent contractor than an employee from an economical and legal perspective. Thus, some employers wrongly classify their workers as contractors even though they can fall under an employee classification.

The IRS uses applies a test spanning over three categories to determine worker’s status as an employee or independent contractor. Under each test the IRS will ask questions similar to the following:

1. Behavioral – does the employer control the individual’s schedule?
2. Financial – does the employer pay all business-related expenses on behalf of the worker?
3. Type of relationship – does the employer provide employment benefits, such as health and disability?

If the answer to any of the above is “yes” then additional steps will need to be taken to confirm employee vs independent contractor status. If the IRS determines that an employee is classified as an independent contractor without a reasonable basis it can hold the employer liable for employment taxes for that worker since the hire date in addition to penalties.

The IRS has many programs that can help the employer and employee to avoid tax liabilities due to misclassification. Section 530 Employment Tax Relief provision, for example, provides relief from having to pay employment taxes if a hiring company has a reasonable basis for not treating a worker as an employee. The Voluntary Classification Settlement Program allows taxpayers to reclassify their contractors as employees with partial relief from federal employment taxes. Form 8919 is designed for workers who believe they have been misclassified as independent contractors to report the employee’s share of uncollected Social Security and Medicare Tax due on their wages.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

Last Opportunity for PA Tax Amnesty

Last Opportunity for PA Tax Amnesty Web

Did you not pay Pennsylvania taxes on time and are afraid to be hit with interest and penalties for late filing? Then this is a chance you cannot miss! Pennsylvania is offering a great opportunity to pay past-due taxes while 100% of the penalties and 50% of the interest will be waived through a tax amnesty program that is in effect from April 21 through June 19, 2017.

Taxpayers and businesses who have tax liabilities as of December 31, 2015, or earlier, are qualified to apply for the tax amnesty with the following exceptions that apply to taxpayers who:

• Filed for bankruptcy
• Enrolled in a voluntary disclosure agreement
• Are under criminal investigation
• Participated in the PA tax amnesty program in 2010

Over 30 Pennsylvania state taxes, such as personal and corporate income tax, sales and use tax, employer withholding tax, are eligible to be waived under the program. To participate in the program, apply online at revenue.pa.gov/taxamnesty or by calling 1-844-727-8283, file past-due returns and pay taxes as well as half of the interest. There are also a few websites that show account status, including liabilities, at www.etides.state.pa.us for business owners and www.doreservices.state.pa.us for individuals.

As the amnesty’s deadline is fast approaching, it is beneficial to seek assistance from your tax advisor prior to applying for the program as there might be other tax implications to consider.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

Purchasing Real Estate? You Should Consider a Cost Segregation Study

Purchase Real Estate Consider a Cost Segregation Study 2

Owners of rental real estate should be aware of the potential tax benefits of conducting cost segregation studies. These studies, conducted by qualified professionals, involve examining the components of residential and non-residential real estate in order to identify portions that may be segregated for depreciation purposes. Should they qualify in accordance with the study, assets are then reviewed to determine whether or not they are subject to accelerated depreciation recovery periods, as opposed to the default straight-line method. Segregations could include electrical, plumbing or mechanical components of a building. Outdoor fixtures may also be potentially segregated as depreciable land improvements.

For the owners of rental real estate, the potential benefits of a cost segregation study go beyond enjoying accelerated depreciation recovery periods. Once separated from the building for tax purposes, property may be eligible for preferential bonus depreciation, or fully deductible under §179 depreciation provisions. Taking advantage of depreciation expenses under accelerated or preferential methods will result in a lower tax bill today, providing the owner an increase in cash flow than would otherwise be experienced without executing the study. In addition, when a segregated component becomes impaired or destroyed, the asset may be written off more simply than if the component was still included in the cost of the building.

Cost segregation studies must be, among other things, prepared by professional with the expertise and experience to do so. The IRS also requires they be, at a minimum, accurate and well-documented, therefore it is important to keep quality real estate and legal records, in order to better assist the professional you chose to conduct your study. A cost-benefit analysis may be beneficial when considering a cost segregation study, as the price incurred should not exceed the potential tax benefits.

For more information, or if you have any questions about this or any other tax matter, please contact your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

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