Author Archives: David A. Stiefel
About David A. StiefelDavid Stiefel is a principal in Bader Martin's tax practice and its accounting and assurance practice. He also serves as the firm's Director of Closely Held and Family Business Services.
An S Corporation Shareholder and an Officer or Employee? Avoid IRS Scrutiny with Reasonable Compensation
Work and play are pretty much the same thing, according to Mark Twain — just under different circumstances.
Work you get paid for. Or you should. And if you’re an S corporation shareholder who also works in the business (providing anything other than minimal services), the IRS will see that you do.
IRS rules require that you receive reasonable compensation for your work. Reasonable compensation in this context is wage income, not distributions or other nonwage payments. In other words, a reasonable (continue reading…)
Claiming a Small Business Health Care Tax Credit? Estimator Tool Can Help Determine If You’re Eligible and For How Much
Need help in providing your employees with health care?
You may be eligible for a federal small business health care credit through December 31, 2013.
For-profit and not-for-profit organizations must satisfy three requirements to be eligible: fewer than 25 full-time-equivalent employees, average wages of less than $50,000 and a qualifying arrangement for employee health insurance coverage.
If you’re a qualifying for-profit business, the maximum credit is 35 percent of your share of the premiums for your employees. If you’re a not-for-profit organization, you (continue reading…)
Providing Complimentary Meals to the Employees of Your Restaurant? Washington State Changes the Tax Rules
Are the complimentary meals you provide your employees really free? Or are they given in exchange for services that employees perform at your restaurant?
The distinction is an important one for tax purposes: It plays a part in determining whether the value of those meals is subject to various Washington State taxes.
You may consider the meals you provide your restaurant’s employees to be complimentary. The State of Washington traditionally has not. And by requiring that such meals be treated as if (continue reading…)
We’re passionate about family businesses at Bader Martin, so we’re proud to once again sponsor the annual Washington Family Business Awards.
Seattle Business magazine’s 2011 Washington Family Business Awards program “recognizes and celebrates excellence in Washington State among family businesses.”
Nominations are accepted in three categories: small businesses (3 - 50 employees), midsize businesses (51 - 100 employees), and large businesses (more than 100 employees).
To be eligible for consideration, a family business must be majority controlled by one or more members of a single (continue reading…)
Undisclosed foreign financial accounts cost the federal government billions of dollars in lost tax revenue—perhaps as much as $100 billion each year. So it’s not surprising that this type of international tax evasion is being aggressively pursued by the U.S. Department of the Treasury.
If you had a financial interest in a foreign bank or other financial account in 2010—or had signature authority over a foreign account owned by a domestic entity, such as a corporation, partnership or trust—you may be subject (continue reading…)
Succession planning isn’t easy. You come face to face with the fact that, inevitably, your business will go on without you.
But if you’re a family or closely held business owner, planning for your eventual departure from the business is critical.
Family businesses comprise more than two-thirds of all businesses in this country, including a significant percentage of the Fortune 500. Nearly 90 percent of family business owners intend for their businesses to remain family owned. Yet history tells us that the odds (continue reading…)
Washington Governor Chris Gregoire has signed into law the state’s first ever tax amnesty program, intended to generate as much as $28 million in revenue.
It’s an approach that 46 other states have tried successfully at least once since the 1980s. During the last two years, 16 states have used amnesty programs to generate $1.4 billion in revenue.
According to Tremaine Smith, Interim Director of the Washington State Department of Revenue (DOR), “We know that many businesses are struggling due to circumstances (continue reading…)
Washington’s domestic partner legislation was first enacted in 2007, then expanded in 2008 and further expanded in the everything-but-marriage legislation signed into law by Governor Gregoire in May of 2009.
Taken together, the legislation extended to registered domestic partners (both same-sex and opposite-sex couples) all of the privileges, immunities, rights, benefits, and responsibilities granted to married persons under state law―including community property rights.
But there was one thing Washington state law couldn’t do: force recognition of those community property rights for federal income tax purposes. The IRS required registered (continue reading…)
It’s said that rules are made to be broken. Apparently the maxim holds true for longstanding tax rules, as well.
The Small Business Jobs Act broadened the expensing rules under Section 179 of the federal tax code, which traditionally apply only to depreciable personal property.
Now, for the first time ever―and only for 2010 and 2011―certain real property is eligible for Section 179 expensing. In general, the new expensing option applies to qualifying restaurant property, retail property, and interior improvements made to leased property.
If you’re (continue reading…)
Small employers simply pay more for health coverage than their large-company counterparts. It’s a fact–their premiums are higher and they also pay more in administrative costs.
As a consequence, they’re less likely to provide their employees with health insurance. Roughly half of all businesses with nine or fewer employees offer coverage while 98 percent of companies with 200 or more employees do. And the situation is worse for the self-employed. The numbers help to explain why so many of America’s uninsured (continue reading…)