Construction contractors wanting to make use of the IRS’ Voluntary Classification Settlement Program (VCSP) have until 6/30/13 to file the required Form 8952 (Application for Voluntary Classification Settlement Program). The VCSP allows taxpayers to voluntarily reclassify workers as employees (instead of independent contractors) for employment tax purposes going forward from the time of the settlement. The program fee is a reduced percentage of the employment tax liability that would have been due and is submitted with the Form 8952. To be eligible, employers must have consistently treated workers as nonemployees (i.e., filing required Form 1099 for at least three years prior to the reclassification. A taxpayer already under an IRS employment tax audit or a DOL worker classification audit cannot use the settlement program. Information is available at www.irs.gov/Government-Entities/Federal,-State-&-Local-Governments/Voluntary-Classification-Settlement-Program-1
Ready to negotiate the sale of your business? First you should sit down with your tax advisor to gain a general understanding of the major tax considerations and constraints that should be evaluated. Partnerships, LLCs, C Corps, and S Corps all have various entity-specific tax consequences that should be evaluated before making any decisions.
The decision analysis process, however, is now more complicated because the top long-term capital gain rate was raised to 20% versus 15%, and there is an additional 3.8% Medicare tax applicable to certain passive investors. In the case of LLC sale transactions, your choices are limited and the transaction will generally be accounted for tax reporting purposes as an asset sale. In the case of a corporation, depending on whether the entity is an S Corporation or you are selling one of the subsidiaries within a consolidated group, it can qualify as Continue reading »
Under the Patient Protection and Affordable Care Act “PPACA,” certain types of health insurance arrangements will be required to pay a new fee by July 31, 2013. The fee is called the Comparative Effectiveness Research Fee or the PCORI fee because the monies will be used to help fund the Patient-Centered Outcomes Research Institute. The types of arrangements subject to the fee are:
- Fully insured medical plans
- Self-insured medical plans
- Plans sponsored by private, government, nonprofit and church employers
- Individuals on a temporary U.S. visa who reside in the U.S.
- Retiree-only plans
- Health Reimbursement Accounts (HRAs)
- Certain Flexible Spending Accounts (FSAs) if the employer contribution is greater than $500 and it is more than the employee contribution
The fee will be reported to the IRS via Form 720, but the revised Form 720 has not yet been made available.
In general, plans with year-ends between October 1, 2012 and December 31, 2012 must file Continue reading »
The Maryland legislature has increased the income tax credit for employer costs related to obtaining federal security clearances and constructing or renovating sensitive compartmented information facilities (SCIF) within Maryland (L. 2013, c. 482, § 1). The legislation also enacted an additional credit for first year rental payments for spaces leased in Maryland by a small business performing security-based contracting. The modifications to the Maryland Employer Security Clearance Costs (ESCC) Tax Credit take effect on Continue reading »
On May 17, 2013, the Maryland Court of Appeals denied the Comptroller’s motion for reconsideration of the Court’s taxpayer-favorable decision issued earlier this year in Comptroller v. Wynne. The Court held the resident credit for taxes paid to other states must include the local tax in addition to the state portion of the tax. Specifically, the decision ruled that the failure to allow a credit for the county tax for out-of-state taxes paid to other states on “pass-through” income earned in those states unconstitutionally discriminates against interstate commerce.
Maryland’s income tax has a state portion with a maximum rate of 5.75% and a county portion with rates that range from 1.25% to Continue reading »
The April slow down in architecture billings was significant enough to result in a negative score for the Architecture Billings Index (ABI), released by The American Institute of Architects (AIA) on May 22, 2013. The April score of 48.6 was the lowest in almost a year. The new projects inquiry index score was 58.5.
The negative April reading should cause contractors to pause and evaluate backlog, especially since the decrease in the ABI score may possibly be a result of financing concerns, as noted by Kermit Baker, AIA Chief Economist. The next couple month’s scores will provide a better barometer for which way construction spending may go, and will provide your company the information it needs for short and longer term business planning.
To learn more about the most recent ABI score please read the AIA’s May 22nd press release.
As reported by Jeff Clabaugh in the Washington Business Journal, the Metropolitan Washington Airports Authority has awarded the design-build portion of Phase 2 of the Silver Line to Capital Rail Constructors which is a joint venture between Clark Construction Group, LLC and Kiewit Infrastructure South Co. The team beat out 4 other teams of contractors as a result of competitive pricing, and meeting the technical requirements of the contract.
The contract, awarded May 14, gives Clark and Kiewit the job of designing and building the 11.4-mile segment of the Silver Line with six stations from Reston through Dulles International Airport and to Ashburn. The notice to proceed is anticipated to be in July 2013 and the project is expected to be completed in 2018. Unlike Phase 1 of the Silver Line, Phase 2 will receive no federal funding for the project, and will be funded primarily by state and local governments.
To read more, please visit the original article.
All employers, including construction contractors, are required to complete form I-9 which verifies identity and authorizes employment of an individual hired in the United States. On May 7, 2013, a revised form released by the Department of Homeland Security U.S. Citizenship and Immigration Services will be required to be used for all new hires and re-verifications. Please ensure your contracting company is using the new forms or your company may be subject to penalties.
A recent Virginia sales and use tax ruling illustrates how ignoring basic sales and use principles can be costly for businesses. The concept is simple – a sales tax is a consumption tax imposed on the end user of a product. Thus, if your company purchases tangible personal property with the intent of reselling the property (i.e., not consuming it), it generally should not pay sales tax on that purchase. This concept holds true for leases as well. However, a purchaser must notify a seller of this intent by providing a certificate to the seller indicating that the purchased product will be resold. Otherwise, the seller is obligated to collect sales tax.
The failure to apply this foundational sales and use tax concept had a costly result for Continue reading »
The passage of the Patient Protection and Affordable Care Act, commonly known as Obamacare or Health Care Reform, has created many questions for employers throughout the construction industry.
Join Aronson LLC and Independent Benefit Services on May 8, 2013 for an informative presentation on the various provisions of healthcare reform that will have a profound impact on how healthcare is delivered and funded in the United States. Our experts will cover the major changes for 2013 and 2014, including new W2 reporting requirements, the Summary of Benefits and Coverage, The Employer Mandate, The Individual Mandate, and The Exchange. Continue reading »