Reimbursement plans can provide large tax savings

Article Abstract:

The employee expense reimbursement plan is one of the most overlooked tool that can provide significant tax reductions for both employees and the employer. Such a scheme can be created to divide the employees' tax savings between the employees and their employer to allow both sides to retain money that otherwise would have been used for taxes. The employee expense reimbursement plan gives employers the avenue to deduct reimbursements of employee out-of-pocket expenses without necessarily following deduction floors, which are required when employees want to deduct the same types of expenses on their own personal return. Reimbursement plans can be applied to medical expenses, dependent care, business travel, public transportation to work, subscriptions to business manage and dues to professional organizations.

Expense deductions

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New tax planning needed for employment-related damages

Article Abstract:

A law change in 1996 removed certain traditional tax methods for generating employment-related damage awards. The Small Business Job Protection Act of 1996 reformed the Sec 104(a)(2) exclusion for personal injury and sickness payments, making it harder to exclude employment-related damages from income. Planning strategies for excluding damage payments from income by assigning a fraction of the payment to personal injuries have been dropped. As a result, settlement of cases would be much more difficult. By limiting the exclusion from income to physical injuries only, settlement payments to fired employees are taxable. The change also removes the controversy over the taxation of payments arising out of the terminated employee's employment.

Laws, regulations and rules, Accounting and auditing, Health insurance, Personal injuries, Damages, Damages (Law)

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Divorcing business owners need tax planning

Article Abstract:

There are several taxation-related issues that should by considered by joint owners of family businesses who are planning to get a divorce. Divorcing couples have the option of continuing the joint ownership of the business, splitting the company into half or incorporating the business. Under a joint ownership, a transfer of shares between the couple may be needed if the business is a sole proprietorship or if ownership interests are not balanced. If the divorced couple opts to divide ownership, the available options include transfers to a trust or the sale of one portion of a business to the transferee. For business that will be incorporated, the divorced couple may opt to continue joint ownership or divide ownership between themselves.

Taxation, Family-owned business enterprises, Family-owned businesses, Property, Divorced people

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