By Bill
Summer Hiring Rules for Sole Proprietors and Partnerships
Sole proprietorships and partnerships100%-owned by parents:
- Children of the owner can work any number of hours or time of day, regardless of their age. If under 16, they cannot do any hazardous work (e.g., work with lawn mowers, sewing machines), work near flammable or hazardous materials, or where food is cooked.
- If a 100% parent-owned sole proprietorship’s or partnership’s only employees are immediate family, the owners’ children need not be paid the minimum wage—but if others are regularly employed, even family must be paid minimum wage.
- If the owner’s children are under 21:
Wages are exempt from FUTA.
- Any children (i.e., not just the owners’ children) who are under 18:
If the business is 100% parent-owned, the children under 18 are exempt from FICA.
If not an owners’ child, obtain an age certificate recognized by the DOL and your state Wage and Hour Division (WHD). DOL often accepts state age certificates, but ask your WHD to be sure. Return it to the worker at termination.
The workers may not do hazardous work.
- Workers of 14-15 years of age who are not theowners’ children can work 8 hrs./day, 40 hrs./wk., June 1-Labor Day, between 7 a.m.-9 p.m. if school is not in session.
Exceptions: Limits do not apply to news carriers or children employed exclusively by a parent/sole proprietor. For agricultural jobs, contact the DOL.
· Other children under 14cannot be hired unless they work for a parent/sole owner.
By Bill
Notable Quotes About Taxation
“The hardest thing in the world to understand is the income tax.” — Albert Einstein
“Like mothers, taxes are often misunderstood, but seldom forgotten.” — Lord Bramwell, 19th Century English jurist
“Taxation with representation ain’t so hot either.” — Gerald Barzan, humorist
“Income tax has made more liars out of the American people than golf.” — Will Rogers, humorist
Taxation should not be a joke. Its time to get on board with the Fair Tax Plan… Please take time to learn and understand what passage of this tax reform plan will do for the American economy and every single individual living in this country.
By Bill
The Individual Shared Responsibility Provision
More commonly known as the ObamaCare Tax
Under the Affordable Care Act, the Federal government, State governments, insurers, employers, and individuals share the responsibility for health insurance coverage beginning in 2014. Many people already have qualifying health insurance coverage (called minimum essential coverage) and do not need to do anything more than maintain that coverage.
The individual shared responsibility provision requires you and each member of your family to either:
- Have minimum essential coverage, or
- Have an exemption from the responsibility to have minimum essential coverage, or
- Make a shared responsibility payment when you file your 2014 federal income tax return in 2015.
You will report minimum essential coverage, report exemptions, or make any individual shared responsibility payment when you file your 2014 federal income tax return in 2015.
Minimum Essential Coverage
If you and your family need to acquire minimum essential coverage, you may have several options. They include:
- Health insurance coverage provided by your employer,
- Health insurance purchased through the Health Insurance Marketplace in the area where you live, where you may qualify for financial assistance,
- Coverage provided under a government-sponsored program for which you are eligible (including Medicare, Medicaid, and health care programs for veterans),
- Health insurance purchased directly from an insurance company, and
- Other health insurance coverage that is recognized by the Department of Health & Human Services as minimum essential coverage.
U.S. citizens who are residents of a foreign country for an entire year, and residents of U.S. territories, are deemed to have minimum essential coverage. See questions 11 and 12 of our Questions and Answers for more information.
For purposes of the individual shared responsibility payment, you are considered to have minimum essential coverage for the entire month as long as you have minimum essential coverage for at least one day during that month. For example, if you start a new job on June 26 and are covered under your employer’s health coverage starting on that day, you’re treated as having coverage for the entire month of June. Similarly, if you’re eligible for an exemption for any one day of a month, you’re treated as exempt for the entire month.
For more information about minimum essential coverage, check this minimum essential coverage chart and see questions 14-20 of our Questions and Answers.
You can learn more at HealthCare.gov about which health insurance options are available to you, how to purchase health insurance coverage, and how to get financial assistance with the cost of insurance. If you purchase health insurance through the Marketplace and you meet certain requirements, you may be eligible for a premium tax credit to help pay your premiums. Learn more about the premium tax credit. The deadline for the initial open enrollment period is March 31, 2014. You may also qualify for a special enrollment period (e.g., you move to a different state). See HealthCare.gov to learn about special enrollment periods.
Exemptions
You may be exempt from the requirement to maintain minimum essential coverage and thus will not have to make a shared responsibility payment when you file your 2014 federal income tax return in 2015, if you meet certain criteria.
You may be exempt if you:
- Have no affordable coverage options because the minimum amount you must pay for the annual premiums is more than eight percent of your household income,
- Have a gap in coverage for less than three consecutive months, or
- Qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage, or belonging to a group explicitly exempt from the requirement.
Because of the Affordable Care Act, more Americans have access to coverage that is affordable. However, if there is no coverage available to you and your family that costs less than eight percent of your household income, you can qualify for an exemption.
An exemption applies to individuals who purchase their insurance through the Marketplace during the initial enrollment period for 2014, which runs through March 31, 2014. This hardship exemption will apply from January 1, 2014, until the start of your health care coverage, which if you enroll between March 16 and March 31 would generally be May 1. (See this HHS Question and Answer for more information.) Another hardship exemption may apply if you have been notified that your health insurance policy will not be renewed and you consider the other plans available to you unaffordable. (See this HHS guidance and Questions and Answers for more information.)
How you get an exemption depends upon the type of exemption for which you are eligible. You can obtain some exemptions only from the Marketplace, others only from the IRS, and yet others from either the Marketplace or the IRS.
Learn more about exemptions in this chart and in questions 21-24 of our Questions and Answers. Also, see Healthcare.gov for more information on hardship exemptions.
Reporting Coverage or Exemptions
The individual shared responsibility provision goes into effect in 2014. You won’t need to report minimum essential coverage or exemptions or make any individual shared responsibility payment until you file your 2014 federal income tax return in 2015. Information will be made available later about how to report your coverage or exemption (or make a payment) on your 2014 income tax return.
Making a Payment
If you or any of your dependents don’t have minimum essential coverage and don’t have an exemption, you will need to make an individual shared responsibility payment on your tax return. It is important to remember that choosing to make the individual shared responsibility payment instead of purchasing minimum essential coverage means you will also have to pay the entire cost of all your medical care. You won’t be protected from the kind of very high medical bills that can sometimes lead to bankruptcy.
If you must make an individual shared responsibility payment, the annual payment amount is the greater of a percentage of your household income or a flat dollar amount, but is capped at the national average premium for a bronze level health plan available through the Marketplace. You will owe 1/12th of the annual payment for each month you or your dependent(s) don’t have either coverage or an exemption.
For 2014, the annual payment amount is:
- The greater of:
- 1 percent of your household income that is above the tax return filing threshold for your filing status, or
- Your family’s flat dollar amount, which is $95 per adult and $47.50 per child, limited to a family maximum of $285,
- But capped at the cost of the national average premium for a bronze level health plan available through the Marketplace in 2014.
Check out these basic examples of the payment calculation and the federal tax filing requirement thresholds. For more detailed examples, see the individual shared responsibility provision final regulations.
The percentages and flat dollar amounts increase over the first three years. In 2015, the income percentage increases to 2 percent of household income and the flat dollar amount increases to $325 per adult ($162.50 per child under 18). In 2016, these figures increase to 2.5 percent of household income and $695 per adult ($347.50 per child under 18). After 2016, these figures increase with inflation.
Information will be made available later about how you will account for the payment on your 2014 federal income tax return filed in 2015.
More Information
More detailed information about the individual shared responsibility provision is available in our Questions and Answers. The Department of the Treasury and the IRS have issued the following legal guidance related to the individual shared responsibility provision, including detailed examples of the payment calculation:
- Final regulations on the individual shared responsibility provision.
- Notice 2013-42, which provides transition relief from the individual shared responsibility provision for employees and their families who are eligible to enroll in employer-sponsored health plans with a plan year other than a calendar year if the plan year begins in 2013 and ends in 2014.
- Proposed regulations on minimum essential coverage and other rules regarding the shared responsibility provision.
- Notice 2014-10, which provides transition relief for individuals enrolled in coverage under certain limited-benefit Medicaid and TRICARE programs that are not minimum essential coverage.
Additional information on exemptions and minimum essential coverage is available in final regulations issued by the Department of Health & Human Services.
By Bill
New Email Phishing Scam
The IRS has been alerted to a new email phishing scam. The emails appear to be from the IRS Taxpayer Advocate Service and include a bogus case number and the following message:
“Your reported 2013 income is flagged for review due to a document processing error. Your case has been forwarded to the Taxpayer Advocate Service for resolution assistance. To avoid delays processing your 2013 filing contact the Taxpayer Advocate Service for resolution assistance.”
The recipient is directed to click on links that supposedly provide information about the “advocate” assigned to their case or that let them “review reported income.” The links lead to web pages that solicit personal information.
Taxpayers who get these messages should not respond to the email or click on the links. Instead, they should forward the scam emails to the IRS at phishing@irs.gov. For more information, visit the IRS’s Report Phishing web page.
The Taxpayer Advocate Service is a legitimate IRS organization that helps taxpayers resolve federal tax issues that have not been resolved through the normal IRS channels. The IRS, including TAS, does not initiate contact with taxpayers by email, texting or any social media.