2016 Year End Tax Tips
In this issue
2016 Year End Tax Tips
Department of Labor: News & Updates
Ask the Accountant
LMC Office Party
LMC: Life Skills
Connect With Us
With December 31st just around the corner, it’s time to start thinking about your 2016 tax return. With that in mind, here’s a list of tax tips for you to think about before the end of 2016:
1. What’s not changing: While President-elect Trump is in a strong position to enact his promise of lower tax brackets next year, it’s important to remember that the current income tax rates of 10, 15, 25, 33, 35 and 39.6 percent are still in effect for the 2016 tax returns being filed next mid-April. The standard deduction amounts remained at their 2015 levels of $6,300 single/married filing separately and $12,600 for married filing jointly. The standard deduction for heads of households, however, rose to $9,300.
2. Charitable Deductions: It is important to remember giving to charity. If you were interested in giving to charity all year and just didn’t pull the trigger yet, December 31st is the last day to give and have the deduction on your 2016 tax return. If you decide to donate on January 3rd , 2017, the deduction will now show on your 2017 tax return. The President-elect has proposed limiting itemized deductions to not more than $200,000 beginning in 2017. Taxpayers considering making large charitable contributions may want to consider donating before the end of 2016 to ensure they will receive a tax benefit for the contribution if the law does change. For tips from the IRS about some recent changes you should keep in mind click here
3. Be careful with mutual funds: Many mutual funds make capital gains distributions in December, so taxpayers will want to bear that in mind when buying or selling. That a fund is or isn’t planning a major distribution needn’t necessarily be a deal-breaker – but it may change the eventual tax bill.
4. Deferring income: If the President-elect does manage to lower and simplify the individual tax brackets per his plan, that means rates next year will be lower, so it might be worth it for individuals to consider deferring some income into 2017. That may mean getting a bonus in January, instead of December, or waiting to redeem a savings bond, or putting off debt forgiveness income.
Minimum wage is increasing in many states across the country. On April 4, 2016, New York Governor Andrew Cuomo introduced a new set of minimum wage increases to be implemented commencing December 31, 2016, and continuing each year until 2021. The minimum wage will rise to $15.00 an hour under different schedules in three state regions: 1) New York City; 2) “downstate,” which includes Nassau, Suffolk and Westchester counties; and 3) the remainder of New York State (“upstate”). The legislation also sets a different schedule of increases for New York City businesses with 10 or fewer employees. As of December 31, 2016, minimum wage in New York will increase depending on company size and location of work performed.
For employees in New York City who are employed by a company that has 11 or more employees, the minimum wage will increase to $11.00 per hour at the end of 2016, $13.00 at the end of 2017, and $15.00 per hour at the end of 2018.
However, for employees in New York City who are employed by a company with 10 or fewer employees, the minimum wage increases are smaller and are implemented over a longer time period, with the minimum wage rising to $10.50 at the end of 2016, $12.00 at the end of 2017, $13.50 at the end of 2018, and $15.00 at the end of 2019.
For employees who work in the New York City commuter counties of Nassau, Suffolk, and Westchester, the minimum wage will increase to $10.00 at the end of 2016, and then will increase in $1.00 increments at the end of each year, until the minimum wage reaches $15.00 at the end of 2021.
For workers in the rest of New York State, the minimum wage will increase to $9.70 at the end of 2016, and then will increase in $0.70 increments at the end of each year, until the minimum wage reaches $12.50 at the end of 2020. After December 31st, 2021, the minimum wage has not yet been determined..Read more
The New York State Department of Labor (“NYSDOL”) published proposed new Wage Orders, “Proposed Amendments”, which, if enacted, will ultimately increase the salary requirements for exempt employees in New York State beyond even the increases under the Fair Labor Standards Act that were slated to go into effect on December 1, 2016 before they were blocked by a federal district court judge (see our news alert 11/20/2016). This could have significant implications for employers in New York.
If enacted, the proposed changes will increase the salary thresholds required to qualify as “exempt” from the Wage Orders’ definition of an “employee” entitled to overtime beginning December 31, 2016. The minimum thresholds will differ, depending on employer size and location. Thus, for the first time, the salary level required to be exempt from overtime will be different in different parts of the state. The most significant change will be evident December 31, 2018, when the minimum salary for exempt executive and administrative employees of “large” New York City employers will increase to $1,125 per week, and thereby exceed the minimum salary for exemption under federal law by over $200....Read More
As we approach the end of 2016, we would like to provide a reminder of the requirements to file 1099s.
A 1099 must be issued to all individuals, LLCs, or partnerships that your business has paid at least $600 to during 2016. Effective for the 2016 tax filing year, the due date and the penalties regarding filing of forms 1099 have been changed. The deadline to file 1099s is January 31, 2017. Note: the new deadline is one month earlier than previous years. This does NOT include employees that will be receiving a W-2 for 2016.
If the failure is corrected within 30 days of the required filing date, the new legislation increased the penalty to $50 per failure up to $500,000. If the failure is corrected after 30 days but before August 1, the new legislation increased the penalty to $100 per failure up to $1.5 million. If the failure is corrected after August 1, the penalty is increased to $250 per failure up to $3 million. For intentional disregard of the law the penalty is increased to $500 per failure to file. ..Read More
Department of Labor; News and updates
Minimum Wage Increase
NYS DOL New Wage Order
New Deadline for 1099s
Life skills: essential topics for young adults
LMC Annual Office Party
nyc dept of finance
In November, professionals from LM Cohen & Company spoke at "Life Skills: Essential Topics for Young Adults," a new young professionals program hosted by Sephardic Bikur Holim based in Brooklyn, NY. Lee M. Cohen, Managing Partner, and Morris E. Antar, Tax Accountant, were invited to speak about taxes. They each spoke about essential topics young adults need to know regarding taxes and tax laws as they enter the world of business. Over twenty people attended this class, and the participants ranged in age from 21 - 27 years old. The participants were mostly recent college graduates, who are now beginning to work in the "real world".
Morris E. Antar taught the students about personal taxes, specifically what are taxes and why individuals file a tax return. He also gave some tax planning tips. Most of the students are filing their taxes for the first time this year and needed to understand what to do, what to avoid, and how to make sure that they do not get a fine or a penalty while filing. Morris also discussed briefly Trump's tax plan and what changes we may see over the next 4 years. Lee M. Cohen’s talk was more focused on corporate taxes. Specifically, the types of business entities, how to register and become a business, and the federal, state and city tax requirements. He also dove into what needs to be filed on your business tax return and the differences between tax returns based on the type of entity.
The students were eager to learn more, asking questions throughout both two hour classes. One of the students, at the end of the class, said, "Lee and Morris really helped me understand how important it is to be organized and to understand the world of taxes. It is not easy, but I now know when I need to file and what to do with my W-2 and 1099. I also understand what is important to ask when I am looking for the right accountant. Who knew the difference between an S Corporation and an LLC? I do now!"
nj division of taxation
internal revenue service
On November 14th, LM Cohen & Company staff enjoyed a night out at our annual LMC office party. This year we started off the night at Escape the Room NYC in Midtown. Our staff was divided into 2 teams. Each team was then locked in separate rooms, and attempted to find the key to unlock the doors and escape. Each team was given one hour to try and escape, but sadly no team prevailed. Even still we all had a great time! We then headed to our next destination; a family style dinner at Reserve Cut in NYC. The dinner was delicious and our staff was able to relax and enjoy a wonderful meal together. Everyone can't wait for next year's party!
LM Cohen & Company News
NYS Dept of taxation
You were right - everything is in the cloud, paper is gone! All the businesses I partner with want to do things over email and video conferences, I have portals now with partners and my new iPhone is the minicomputer I didn’t know I needed. I had to adapt to the new way of doing things, but I must say that using the cloud is definitely faster and more efficient. I need to start sending you my tax information so it can be finished by the deadline, what is the best way to send it to you? Wishing you and your firm a smooth tax season! Thank you!
All the best,
New Cloud User
Dear New Cloud User,
It's inevitable! Whether we wanted it or not, the cloud moved into our lives and we had no choice but to adapt. I must say, after moving my firm towards the newest technology, we have been more efficient and we get things done much faster. We now have new, faster ways to get our clients the tax answers they need, whenever they need them!
As I mentioned, our firm uses the most up to date technology and applications to get your taxes done in the most efficient way possible. We have been using ShareFile with many of our clients. The use of portals is safe, easy, and quick. Federal and state laws continue to get stricter about maintaining the security of clients' Social Security numbers. ShareFile is a secure online storage area that offers an alternative to e-mail for communicating with clients.
Instead of mailing hard copies of documents, or sending password protected files, we can now send the documents through the ShareFile portal safely and quickly. It is also a great place for you to send us all of your tax information at the start of tax season. This tax season I strongly encourage you send me your documents through the LM Cohen & Company ShareFile on our website.
It is also very important that you send us clear, readable documents. We cannot accept copies of documents such as your W2 or 1099 that you have taken with your mobile device. The pictures taken are hard to read, not the proper size and a format that is not conducive to our internal systems. We request you send us scanned PDF copies of your original documents that you received in the mail, and make sure they are clear and legible. Do not send us a copy of something that was scanned more than once. The more a document is scanned, the contents become unreadable, resulting in poor quality. Once documents are printed and then rescanned it makes it harder to read the numbers on the page, and often times pages get lost or are unscanned. Downloading your tax information, such as Forms 1099, W-2, and health coverage statements, directly from the provider's web sites when possible makes for excellent document quality and those PDF files can be sent through ShareFile.
LM Cohen & Company is prepared for the tax season and we are looking forward to working with you (and the cloud!)
Lee M. Cohen, CPA
Lee Cohen, CPA
Managing Partner of LM Cohen & Company
Ask the Accountant!
The feeling of excitement when you receive a tax refund until you realize it was actually your own money in the first place.
Have a question? Call or email us!
We look forward to hearing from you!
Note: Federal and state laws continue to get stricter about maintaining the security of clients’ Social Security numbers. We urge you this tax season to send us your documents through the LM Cohen & Company ShareFile on our website. If you have any questions please feel free to call us.
DO send us your documents through the Share File
DON'T send us images of your files
DON'T email us your documents
LMC Tax Season DOs and DON'Ts
Prepare for this years tax season with our...
DO send your documents in a timely fashion
DO send in ORIGINAL documents whenever possible
Photos taken of documents with your cell phones are not acceptable!
Download your tax information, such as Forms 1099, W‐2, and health coverage statements, directly from the provider’s web sites when possible.
If you can't read it, neither can we!
DON'T send us copies of documents that have been scanned more than once
L.M. Cohen & Co. will be closed on the following days in observance of national and religious holidays:
Monday, December 26, 2016
Monday, January 2, 2016
LM Cohen & Co.
1 West 34th Street, 8th Floor
New York, NY 10001
F. 212-967-2656 email@example.com
Jan 17, 2017
Federal, NYS, NJ Individual, Estate & Trust, and NYC UBT 4th Quarter estimated tax payments due
Jan 20, 2017
NY Sales Tax for Monthly filers due
Jan 31, 2017
NEW DEADLINE: Form 1099 & Form W-2 must be sent out to workers and the IRS
NY Sales Tax for Monthly filers due
February 28, 2017
NY State Domestic and Foreign LLC, LLP and Partnership annual filing fees due
March 15, 2017
1120S - S Corporations Tax Returns (Form 1120S), NYC UBT Partnership Tax Returns (Form IT-204) - NEW DEADLINE, and Partnership Tax Returns (Form 1065) due - NEW DEADLINE
1120S and 1065 Extension requests due
Mandatory 1st Quarter estimated tax payments for NYS and NYC C-Corporations (remains March 15th although returns are now due on April 18th)
March 20, 2017
NY Annual Filers 2016 Sales Tax Return due, NY Sales Tax for Monthly filers due , NY Sales Tax for Quarterly filers due
April 18, 2017
Individual Tax Returns (Form 1040), Corporate Tax Returns (Form 1120) - NEW DEADLINE, NYC UBT Individual Tax Returns (Form IT-202), and Trust & Estates Tax Returns (Form 1041)
Federal, NYS, NJ Individual, Estate & Trust, and NYC UBT 1st Quarter estimated tax payments due
Report of Foreign Bank and Financial Accounts (Form FinCEN Report 114 ) due with 1040 Individual Tax Return
April 20, 2017
NY Sales Tax for monthly filers due
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