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Tax penalties and health care coverage

Obamacare (Affordable Care Act) Taxes and Penalties

Penalties Increase for Individuals and for Employers under Obamacare (Affordable Care Act)

Tax penalties and health care coverage
Play or pay

As promised, Obamacare taxes and penalties for not having health insurance are on the rise.  The following is a summary of  what to know:

 

Individual Health Care Penalties

The penalty for not having minimum essential coverage [MEC, ACA defined] in 2016 will increase to the following:

· The greater of (a) 2.5% of taxpayer’s household income over the filing threshold or (b) $695 per person ($347.50 per child under age 18) ($2,085 per family whichever is higher) OR the cost of the national average premium for a Bronze level health plan.
· Remember to save your 1095-A if you are a part of the Exchange. You should receive in January 2016 and will need it for your tax return.

Note : Open enrollment for 2016 coverage begins on November 1, 2015.

Employer Health Care Penalties

The Trade Preferences Extension Act of 2015 significantly increases penalties for companies failing to file correct information, returns, or provide correct payee statements. Penalties increased from $100 to $250 per return or statement with a cap increase up to $3 million.
Beginning in 2016, all companies with 50 or more Full Time Equivalent employees [FTE, defined by ACA] are required to report to the IRS whether they offer their FTE and their qualified dependents the opportunity to enroll in MEC under an employer-sponsored plan. Companies are required to file a transmittal report (Form 1094-C) which summarizes the Forms 1095-C which must be provided for each FTE employee who was employed for one or more months during 2015.

Employers who have fewer than 50 FTE but who sponsor a self-insured group plan must also file reports 1094-B for transmittal and a 1095-B to each employee.

Information that must reported to the IRS includes:
· The name, address, and employer identification number of the provider.
· The statement recipient’s name, address, and taxpayer identification number, or date of birth if a TIN is not available. If the statement recipient is not enrolled in the coverage, providers may, but are not required to, report the TIN.
· The name and TIN, or date of birth if a TIN is not available, of each individual covered under the policy or program and the months for which the individual was enrolled in coverage and entitled to receive benefits.

Employers should have steps and infrastructure in place to gather information reflecting coverage offered in plan year 2015, which can include monthly tracking.

Information you need to track:
· Date coverage is offered
· Proof of offering
· Employee Share of the Lowest Cost Monthly Premium for Self-only Coverage

Important Dates to Note:
· February 1, 2016 – Employee Statements are due
· February 29, 2016 – IRS Statements due if filing by paper
· March 31, 2016 – IRS Statements due if filing electronically (must file electronically if filing 250 or more forms)

Note: Employers who have fewer than 50 FTE and are not offering a self-insured group plan have no filing requirements.

band performing

Recording Industry Contracts – What To Look For

band performing
Negotiate your recording industry contract

The Ins and Outs of Recording Industry Contracts

One of the most exciting moments in an artist’s career is when he or she receives his first recording contract.  This can represent your  “big break” and an opportunity to market your music and gain more fans, followers and ultimately sales. The smart artist carefully reviews his contract before committing to any music marketing company, recording industry contract, or other agreement.  This is extremely important.  Committing yourself to the wrong contract can limit your artistic freedom, obligate you to produce a nearly impossible amount of music in a short period of time, and restrict you from working with your favorite musicians or producers. Here is a list for some common things to look out for:

Your minimum recording commitment

In summary, your minimum recording commitment (or “MRC”) spells out how much music you have to produce for the marketing company or record label in exchange for their services.  The MRC can be phrased in terms of the number of singles or number of albums, or sometimes both.  Have a good idea based on your experience of how long it takes you to produce a song or album.  You  will need to have enough time to create a quality product without sacrificing your artistic integrity, which is what brought you the contract in the first place.  The timeframe for meeting your MRC can often be pretty tight, which brings us to our next point:

The Recording Industry Contract Term

Rather than being for a year or for a certain number of albums, many recording industry contracts create several back-to-back terms that obligate you to meet your MRC within each term.  These can be as short as six months.  The contract typically gives the label or marketing company the option, but not the obligation, to cancel or renew the contract at the end of the each term while keeping the work you have produced thus far.  This often a pretty one-sided deal.  You may not have the same right to cancel if you’re unhappy with the relationship.  Ideally you would want either one of you to have the option to cancel the relationship after each successive term or extend the whole term in the recording industry contract so there is more of a mutual commitment.

Getting a Win-Win Deal

You scratch my back I’ll scratch yours as they say.  Many recording industry contracts are pretty thin on detail when it comes to what exactly the record label or marketing company will do for you.  You should have a very clear idea of what you want out of the deal and how the company plans to give it to you.  Are you looking for social media promotion?  Bookings?  Paying for your production and CD costs?  Perfecting your listings on iTunes, submitting your material to Spotify and Pandora and registering you with the performing rights organizations?  These are all critical parts of marketing your music.  Keep in mind too that most of the money in the music industry is made in live performances and merchandising rather than unit sales.  Be aware of  smaller companies that claim to have hot “industry contacts”.  Such companies often claim that they’ve worked with big artists and launched their careers.  Obviously these claims may be true, and this might be a great relationship for you, just be aware of claims that are very hard to prove.  Do your homework. What does their website look like?  How long have they been in business?  Exactly which artists having worked with and is their name on those artists websites or CDs, etc.

Music Industry Relationships and Leverage

Always know who has more bargaining power in any relationship.  If you’re looking at a contract from Virgin Music or Sony, suffice it to say that there’s probably not a whole lot you can do in terms of negotiating terms, and you are probably lucky to have such an opportunity.  If you’re dealing with a smaller company though, know that they might be hungry just as you are, and you may have more power negotiating terms if you already have an established fan base, merchandising relationships, and other things going for you that make you easier to market.  It’s sort of like the joke about getting a loan – the only people who get them are those who don’t need them.  The best contracts go to artists that have already done a lot for themselves and already have a following.

Getting the right advice in advance can make the difference between hitting it big and ending up with an impossible situation.  Call me for consultation and contract review.  A little good advice and perspective at the beginning can save you a lot of headaches down the road and open you up to  win-win deals that will deliver what you’re really looking for.

Ari Good, Esq.

(786) 235-8371

IRS tax deductions

Congress Mulls Extending Tax Deductions

Congress Considers Extending Tax Deductions

IRS tax deductions
Bringing your deductions back

There have been significant recent efforts in Congress to renew tax extenders which expired at the end of 2013. All indications are that these provisions will likely be retroactively reinstated to January 1, 2014. The bills should be finalized by no later than November after the mid-term elections.

Key extended tax deductions would include:

· Above-the-line deduction of up to $250 for expenses of elementary and secondary school teachers

· Exclusion from income for mortgage debt forgiveness on primary residence

· Deduction for mortgage insurance premiums

· Deduction for state and local general sales taxes

· Above-the-line deduction for higher education expenses (Tuition & Fees Deduction)

· Tax-free distributions that go directly from Individual Retirement Accounts (IRA’s) to charitable organizations

· 10% credit for purchases (up to $500) of energy efficient improvements to existing homes
Business Provisions

· Research and experimentation tax credit

· 50% bonus depreciation on purchases of new equipment and fixed assets (with special rules for vehicles)

· Increased section 179 expensing limits ($500,000) (Currently only $25,000).

Not surprisingly these are among the most popular of the tax deductions that benefit both businesses and individuals.

Stay posted.

Ari Good, JD LL.M. is a Miami tax attorney advising clients in income tax, employment tax, aviation tax, entertainment tax and IRS tax law issues.  A top tax attorney in Miami, Mr. Good fights the IRS and Florida Department of Revenue in tax litigation and tax negotiation matters.

Call me now: (786) 235-8371

Hangar vs. Tie-Down: Where to park your Aircraft

Although overlooked at times, where you store your aircraft is a very important part of being a responsible owner. Whether you decide to hangar it or tie it down, where and how you store your plane can change its re-sale value, extend its longevity, or conversely, cost you a lot of unnecessary expenses. It all depends on how you look at it. So let’s look at the pros and cons of storing your aircraft in a hangar versus keeping it tied down outside.

Obviously hangars can cost a lot of money. Money no object who wouldn’t want the private suite?  While prices differ, hangaring your aircraft can cost you up to $500-$600 per month, which is hundreds more than keeping it tied down outside. Tie-down fees can run anywhere from $50-$100 per month. There are reasons for this.. A hangar offers far better protection from natural elements, therefore reducing potential damage and devaluation of your plane. Tying your aircraft down outside, while costing far less money, will leave it exposed. This may be a wise financial decision if you are in an area where inclement weather is rarely an issue, not so much if you’re basking in the Florida sun or braving a New York winter. Always remember to check prices with FBOs before you land, as prices tend to change based on location.

There are two main types of hangars to consider should you choose that option. The most common single-plane hangar setup is known as a “t-hangar” for its shapeA t-hanger is designed to fit the shape of the body of your plane. It’s narrow in the back for the tail and wide enough for the wings in the front. The other is called a “shared hangar”. Shared hangars are more affordable, though with many planes sharing the same space you run a greater risk of “hangar rash”. Poorly maintained hangars or bad planning can increase your risks of hangar rash.

Tying down your aircraft, if done properly, can be a cost-efficient, and perfectly reasonable way to park at an airport. The best way to do this is known as the 3-point tie-down. The 3-point tie-down involves securely fastening your aircraft by both wings and the tail. If done right this will keep your plane from tipping due to jet/prop efflux or strong winds. Keeping your aircraft tied down rather than hangared can save you thousands of dollars per year, but again, it could cost you more in the long run due to repairs and maintenance in tough climates.

Whether you choose to hangar your aircraft or tie it downthe most important factor is that you feel comfortable where you keep your plane. Peace of mind goes a long way in aviation, and keeping your aircraft in good condition is essential becoming a confident pilot or owner. Always remember to check prices with your destination’s FBOs, and go with what makes you feel the most secure about your aircraft. With proper planning and wise decision-making, you’ll feel more confident about your craft, and how you fly.

Contact us for more information or recommendations to industry experts who can guide you in selecting your best options and help you plan your flights.

Passenger Liability Waivers: Who’s responsible?

signing liability waiverOk, so you’ve purchased your aircraft and you’re ready to fly. You’ve got your insurance, received all the proper clearances from the FAA, and even planned on taking up some friends with you on your first flight in your new plane. But what happens if something goes wrong? What happens, God forbid, if one of your passengers is seriously injured, or even killed? Who is legally held responsible? The answer lies in liability waivers.

Liability waivers are an important part of covering yourself from potential legal action should something go wrong while taking people with you on a flight. Even if you’re flying with your best friend, the importance of having EVERY passenger sign a waiver before takeoff cannot be casually ignored. Should an accident happen while the aircraft is under your control, YOU may be responsible for any physical damage to your passengers, and in the case of death, liable to their estate. With a certified, signed, legal waiver, your passengers are agreeing to remove you from any liability involving injuries incurred by them, should something go wrong during the stated flight.

This waiver needs to be made in accordance with what type of aircraft you are flying and your flight certifications. It should detail, in writing, that in the case of accident or death you as the pilot and proprietor would not be held legally responsible. It is also important that you stipulate where you plan on flying, as different states have different laws regarding aircraft liability. Make sure that you specify that the passenger will also be signing on behalf of their estate. Without this their estate can still sue you even if they have signed off on liability as an individual. Lastly, remember to keep all signed waivers on the ground, not with you in the airplane.

A skilled aviation attorney should always handle these types of legal documentation for you. If you need one contact us for a simple yet thorough liability waiver for you at a reasonable cost. Covering your bases and staying out of legal trouble is a crucial part in safe flying. Paying attention to details makes all the difference in the world.