June, 2013 | RKL LLP
Posted on: June 26th, 2013

New Fee for Companies with Self-Insured Health Plans due July 31

self insured health plans blog chartIs your health plan self-insured? Does your health plan have an HRA and/or an FSA?

If so, you may be required to pay a new excise tax and complete Form 720 with the IRS by July 31, 2013 as part of new rules under the Patient Protection and Affordable Care Act of 2010. If your health and welfare plan service provider hasn’t been in contact with you about the fee, here’s what you need to know.

What is the PCORI fee?
This new fee was established to fund the Patient-Centered Outcomes Research Institute (PCORI). The Institute is a private, non-profit organization that researches, compiles and distributes comparative clinical effectiveness findings to assist patients, clinicians, purchasers and policy-makers in making informed health decisions.

Who does the fee apply to?

  • Companies with self-insured plans
  • Companies with HRAs and/or FSAs

How much do I pay?
The fee is equal to the average number of lives covered during the plan year multiplied by the applicable dollar amount for the year. One of three methods can be used to determine the average number of covered lives – the actual count method, the snapshot method and the Form 5500 method.

The applicable dollar amount for plan years ending on or after October 1, 2012 and before October 1, 2013, is $1. For plan years ending on or after October 1, 2013 and before October 1, 2014, the applicable dollar amount is $2. For plan years ending after October 2014, the applicable dollar amount is the prior fiscal year’s dollar amount plus an adjustment for inflation.

What’s the timing of the fee?

  • The fee applies to plans years ending on or after October 1, 2012 and before October 2, 2019
  • Form 720 and your payment must be filed annually by businesses with self-insured health plans by July 31 of the year immediately following the last day of the plan year
  • The first filings of the fee are due July 31, 2013

What should I do next?
First, contact your health and welfare plan service provider for help in determining the impact this excise tax may have on your business and for help in calculating the average number of lives covered and the fee. If you need assistance preparing and filing Form 720, contact your RKL advisor.

Please note: This is only a summary of the PCORI fee imposed on plan sponsors of applicable self-insured plans and should not be relied upon to determine the applicability of the fee for your business or to calculate the fee.

Contributed by Laura Rineer, CPA

Laura Rineer is a CPA and supervisor in RKL’s Small Business Services Group. She brings more than nine years in public accounting to RKL. Laura specializes in helping small businesses from a wide variety of industries with financial statements, tax returns and related accounting and business needs.  

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Posted on: June 25th, 2013

Charitable Giving: Gifting Stock Maximizes Impact

gifting stock

Want your charitable gift to make the maximum impact on your favorite charitable organization? Think twice before writing a check or liquidating appreciated stocks or mutual funds. By gifting stock directly to a qualified charitable organization, you create a multiplier effect on your gift to stretch it even further toward helping the organization’s mission.

With the market on the up-swing and asset appreciation on the rise, now could be a great time to utilize that stock you received from your grandmother years ago that’s collecting dust and put it to work in meeting your charitable goals.

A Win for You: Personal Tax Savings Benefits

By donating the stock directly to the qualified charitable organization, you’ll receive a charitable contribution deduction on your tax return based on the fair market value of the property donated. But what’s more, by donating the stock directly to the qualified charitable organization, you can avoid paying taxes on the gain in value when the stock or mutual fund is sold.

The taxes saved will include capital gains taxes (15% or 20%, depending on your income level), potential Medicare surcharge tax on net investment income of 3.8% (depending upon your income level), and state taxes, as well.

A Win for Your Charitable Organization of Choice

With your gift of stock, your favorite qualified charitable organization receives a larger donation to help fund its mission. Since charitable organizations are tax-exempt, they are not required to pay tax when they sell the donated stock or mutual fund.  As a result, the fair market value of your stock is received directly by the organization, with no tax impact on giver or receiver.

Considering your 2013 charitable giving strategies? RKL’s trusted tax advisors can help you make smart choices that foster bigger deductions and maximum impact to the charities of your choice. Learn more about our Tax Services Group or contact your RKL service provider.

Contributed by Scott Myers, CPA, CSEP

Scott is a Manager in RKL’s Tax Services Group. His area of emphasis is providing tax planning strategies and compliance solutions for closely-held businesses in a wide variety of industries and as well as individuals. Scott also focuses on estate and trust planning for individuals and their families.

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Posted on: June 25th, 2013

Bonus Depreciation Rules for 2013

It’s come and gone, only to return again. Bonus depreciation, first enacted by the Bush administration after September 11, 2001, is aimed at spurring capital spending by U.S. companies. Extended by the Obama administration as part of the American Taxpayer Relief Act of 2012 (ATRA), passed in 2013, bonus depreciation continues to provide companies significant tax breaks on qualifying assets, from furniture/fixtures to vehicles to machinery/equipment and beyond.

Considering capital expenditures in 2013? With the future of bonus depreciation rules unclear, if you’re contemplating any capital expenditures in the coming months, 2013 may be the right time to act.

2013 Section 179 Depreciation Rules:

  • Maximum amount is $500,000, beginning to phase-out dollar for dollar for purchases of qualified property totaling more than $2 million.
  • Taxpayer must have taxable income to claim. Cannot create a loss when claiming Section 179.
  • Section 179 applies to new or used purchases.

2013 Section 168 (k) (or Bonus) Depreciation Rules

  • A 50% Bonus Depreciation extended through the end of the year.
  • The qualifying asset must be placed in service by 12/31/13.
  • Original use of the asset must commence with the taxpayer.
  • Qualifying assets must have a tax depreciable life of 20 years or less.

These rules apply for federal tax purposes.  States vary in their treatment of bonus depreciation and Section 179 expense, but no states are more generous than Federal tax rules.

Have questions about 2013 depreciation rules? Contact your RKL service provider. Or learn more about RKL’s Tax Services Group.

Contributed by Scott Myers, CPA, CSEP

Scott Myers is a Manager in RKL’s Tax Services Group. His area of emphasis is providing tax planning strategies and compliance solutions for closely-held businesses in a wide variety of industries and as well as individuals. Scott also focuses on estate and trust planning for individuals and their families.

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Posted on: June 15th, 2013

RKL CPAs Support CASA and Central PA Community

From Iron Man to Wonder Woman, heroes of all kinds were out this weekend for CASA Lancaster’s 2nd Annual SuperHero 5K and Kids Fun Run.  RKL was there to cheer on walkers and runners of all ages as the finish line sponsor, providing cool refreshment and kudos for a job well done.

With several team members involved in this important cause, the Child Appointed Special Advocate (CASA) program is near and dear to RKL’s heart. Through the help of volunteer trained advocates, the program helps ensure that neglected or abused children have a voice and are placed in a safe and loving home.

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Posted on: June 14th, 2013

RKL CPAs Stand Up Against Cancer at Relay for Life

Team members from RKL’s Reading office came together on a beautiful June day to support Relay for Life of Western Berks. RKL Relay-ers joined community members to raise awareness and funds for cancer research. One of the biggest events of its kind the nation, the 24-hour relay event drew more than 800 participants, raising more than $200,000.

While each team member has his or her own experience that got them involved in the Relay, they also walk in memory of RKL partner, colleague and friend, Jim Houck, who lost his battle with cancer in June 2011.

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