IRS

By Nathan Vinson, Attorney English, Lucas, Priest and Owsley, LLPIf you own a small business, offering health insurance to your employees is likely one of your biggest headaches. There are an incredible number of options for health insurance, including the use of health savings accounts. Some small businesses have never offered it for those reasons, and because the costs of it can send a company’s expenses through the roof.It’s understandable – and until recently, it was entirely legal. Employees could go elsewhere for insurance, such as through a spouse’s work or purchase it privately. But the Affordable Care Act changed all of that. The Act mandates that businesses offer health insurance to employees and their dependents. The rules were phased in over time (but they’re here now), and it’s only for those businesses that hit certain thresholds. An excellent Associated Press article recently outlined all of the thorny problems for small businesses. You can read that here. Read More

By Nathan Vinson, Attorney English, Lucas, Priest and Owsley, LLPAlmost everyone makes charitable donations of some kind, and many of us expect to deduct the value of those donations from our income when our taxes are being prepared. While it’s not a primary motivator for most who give to charity, it certainly helps spur some giving and motivates some to meet charitable obligations prior to the end of the calendar year.Here are a few tax rules to keep in mind when making charitable donations of property (i.e. noncash donations), as federal tax law and regulations require certain documentation of gifts depending on the value of the gifts.  In tax parlance, these rules are called “substantiation” requirements.For gifts under $250, minimal documentation is required to claim a tax deduction. While it is generally required that the taxpayer obtain a receipt from the charitable organization, the taxpayer is excused from doing so if getting a receipt is “impractical.”An example that the tax regulations use is dropping off property (i.e. clothing) at a charity’s unattended drop site (i.e. a Goodwill drop box after store hours).  In that instance, taxpayers are required to retain in their own records (but not submit to the IRS) documentation containing:the name and address of the charity; the date and location of the donation; a description of the property, including its value; the fair market value of the property contributed and the method used to determine the fair market value; and possibly other documentation.As you can see, it may just be simpler to get the receipt! Read More

By Nathan Vinson, attorney English, Lucas, Priest & Owsley, LLPThe IRS is considering changing the way it taxes gambling payouts.Since 1977, the IRS has required those who won $1,200 or more from slot machines or $1,500 or more from Keno to report and pay taxes on those winnings. We wrote about this rule earlier this year as it pertains to horse racing, a subject near and dear to Kentucky hearts.After nearly 40 years of this practice, the IRS is considering changing that limit to $600, and casino gaming operators aren’t pleased. Read More

If you have a financial account in a foreign country with $10,000 or more in it, you are required to report the amount to the IRS once a year. The deadline for filing IRS Form 114, the Foreign Bank Account Report (i.e. the “FBAR”), has always been June 30.Recent legislation that President Obama signed into law, the Surface Transportation and Veterans Health Care Choice Improvement Act, had a provision to also change the FBAR due date. In addition to changing the date to April 15, which is more in line with other common due dates for various types of tax returns, there is a six-month extension available, making that deadline October 16. But just like other tax filing deadlines, you must request the extension.The new rule also waives any penalties for someone new to the process who is filing for the first time, a generous provision that will help anyone confused by the rules for FBAR filing. If you’d like to read the IRS guidance on FBARs, you can find it here. Read More

By Nathan Vinson Attorney, English, Lucas, Priest & Owsley, LLPTax season is behind us (ahh, it feels nice to type this…) but it’s never too early to remind folks what to look for in a tax preparer – particularly given the news out of the U.S. Department of Justice earlier this year.The U.S. Department of Justice banned a Kentucky man from preparing tax returns for life after auditing several of his clients’ returns. He offered a service in which he would go to the home of a client and prepare their tax returns on the spot, but he filed fake deductions, including using his own relatives as dependents on their returns and falsifying letters from churches indicating that people had donated money that they had not. He is banned from preparing taxes for life, and rightly so. The Internal Revenue Service takes incidents like this very seriously and has taken a necessary step to help keep the tax preparation industry free of con artists. Read More

By Nathan Vinson Attorney, English, Lucas, Priest & Owsley, LLPAh, spring in Kentucky. If you automatically think of horse racing when you read that statement, you’re not alone – lots of folks do. It’s a great pastime particularly beloved in the Bluegrass State.This year, we’ve watched the rise of American Pharaoh as the horse that won the Kentucky Derby and Preakness. Next up is the Belmont Stakes, set for June 6 in Belmont Park, Elmont, New York. If American Pharaoh takes the Belmont Stakes, he will be the first Triple Crown winner since Affirmed in 1978. The allure of picking a Triple Crown winner often draws a lot of interest from long-time gamblers and novices alike, so we thought we’d review with you what happens if you do, indeed, win big at the track.If you are clutching that winning ticket as your pony crosses the finish line, it’s a safe bet that the government wants a cut of those winnings.There are two ways to win at the track: (1) bet on a horse or (2) own a horse. The government is only interested in knowing about your win as a gambler if you win $600 or more, and if your winnings are at least 300 times your wager (e.g. winning $600 on a $2 bet). Of course, all winnings, no matter what the amount, are taxable. Read More