DDK & Company is dedicated to being more than a CPA firm that focuses solely on minimizing taxes, avoiding penalties, and preparing financial statements. We are committed to helping you build and manage your business, as well as take care of your personal financial concerns. We balance our hand holding approach with our promise that you will receive honest, quality and useful advice, which will lead to results worthy of your time and money.
DDK's Leonard Nakrin is One to Watch! Read about it in this week's edition of Long Island Business News.
During June 2013, the Supreme Court held, inU.S. v. Windsor, that a federal law that defined marriage as a union between one man and one woman was unconstitutional.
The Court's decision allowed the federal marital deduction for estate tax purposes for bequests to a decedent's same sex spouse. The decision also impacted certain employee benefits that previously had been taxable when provided to same sex spouses. For example, pursuant to an employer's flexible spending or cafeteria plan, an employee's federal taxable wages can now be reduced by payments for health insurance premiums with respect to his or her same sex spouse. Before, the employee would be required to pay these premiums with after-tax dollars.
The Court's decision was retroactive. As a result, employers and employees have been overpaying FICA employment and federal withholding taxes with respect to spousal health insurance for the benefit of same sex spouses. The IRS recently issuedNotice 2013-61that explains how employers and employees may make claims for refunds for overpayment of FICA taxes and Federal income tax withholding.
Claims may be made for taxes paid on returns filed within the past three years. Normally, employers are required to file Form 941-X for each calendar quarter for which a claim is made. However, the Notice provides for a special procedure that allows employers to claim the adjustments for all four quarters of a calendar year on one Form 941-X filed with respect to the fourth quarter of that year, provided that employees are reimbursed or repaid for the over withheld taxes. The Notice also provides detailed rules for reflecting the changes in the third and fourth quarter 2013 filings.
Please consult with your DDK advisor if you would like more information regarding this refund opportunity.
On June 28, 2013, a New York Appellate Court reversed the ruling of the Supreme Court of New York State (Nassau County Court) in Mangano V. Silver. The lower court ruled that the Metropolitan Commuter Transportation Mobility Tax (MCTMT) was unconstitutional. The appellate court concluded that the MCTMT is in fact constitutional.
New York enacted the MCTMT on May 6, 2009. The tax as it was initially enacted applied to all payroll paid to employees for work performed within the 12 counties serviced by the MTA. The tax was levied at a rate of .34% for employers with taxable payroll in excess of $2,500 per quarter or self-employed individuals with the self-employment income in excess of $10,000 per year.
Effective April 1, 2012, legislation was passed which raised the thresholds to $312,500 in payroll for any calendar quarter and $50,000 of self-employed income per year. This legislation also created graduated MCTMT tax rates for taxable payroll under under $437,500, thus providing additional relief to smaller businesses.
The Supreme Court of New York State (Nassau County Court), on August 22, 2012, held that the tax as enacted is unconstitutional on a number of technical grounds. The court found that the tax is a special law that does not serve as a substantial state interest. Therefore, under the New York State Constitution, the law should have been passed either with a home rule message or by message of necessity with two thirds vote in each house. Because these procedural requirements were not met, the lower court held that the tax is unconstitutional.
Appellate Court's Conclusion:
The appellate court concluded that the MCTMT law, which provides a funding source for the preservation, operation, and improvement of essential transit and transportation services in the Metropolitan Commuter Transportation District, does serve a substantial state concern. Therefore, the passage of the MCTMT did not necessitate a home rule message. Accordingly, the Appellate Court reversed the lower court and held that the MCTMT in infact constitutional.
This discussion is for your general knowledge and is not meant for specific tax advice. Therefore, please consult with your DDK advisor in order to obtain advice that is specifically tailored to you.
Important FBAR Reminder: Annual deadline is June 30, 2013
Taxpayers with either a financial interest or signature authority over foreign bank or financial accounts that, in total, are valued at U.S. $10,000 at any time during calendar year 2012 have to file Report of Foreign Bank and Financial Accounts (Form TD F 90-22.1, commonly known as the "FBAR"). This Report must be received by the Department of the Treasury by June 30, 2013. If the FBAR is not received timely, then the penalties could be onerous. read more...
The New York State 2013-2014 budget was passed on March 28, 2013. Following is a summary of the major tax provisions.
Business Franchise and Income Tax Provisions
Metropolitan Business Tax (MTA) Surcharge
The 17 percent MTA Surcharge was extended for an additional five (5) years for taxable years ending before December 31, 2018. The MTA Surcharge applies to NYS corporate franchise, bank franchise, insurance franchise, and Article 9 corporation taxes. read more...
NYS Court of Appeal Upholds "Amazon" click-through Nexus Law
In 2008, New York State enacted legislation requiring Amazon.com and other Internet retailers with gross receipts in New York in excess of $10,000 to collect New York sales tax on purchases by New York residents. The 2008 legislation applies to Internet retailers whose only connection to New York was through New York-based "affiliates" which enable New York residents to reach the Amazon.com website by clicking on a link posted on the websites of the "affiliates." Amazon and Overstock.com, a smaller competitor, both challenged this law in court. read more...
If you're a DDK & Company Employee, login right here to access your account.
Login to your Tax Notebook or register for a new account.
Login to our File Transfer Center and secure file transferring system.