Challenging and Defending Compensation and Use of the Independent Investor Test C corporations and S corporations should pay shareholder/executive compensation based on the fair market value of the executive services rendered—or risk being audited and possibly penalized by the Internal Revenue Service. Forensic analysts can help companies determine reasonable shareholder/executive compensation using free or fee-based compensation data, with consideration of statutory authority and judicial precedent. This discussion (1) summarizes the federal income tax statutes and judicial precedents related to shareholder/executive compensation, (2) provides a list of frequently relied upon executive compensation data sources, and (3) reviews important issues presented in…
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When helping clients claim Social Security benefits, past planning strategies may act as the best guides. Over the last several months, we published dozens of stories including insight from advisers and analysts on Social Security planning tips and strategies. Some of these include insight related to long-term funding issues, clients working abroad, evaluating the impact of taxes as well as tips for dealing with Gen X and millennial clients. To read the full article in Financial-Planning, click: Social Security: Help Clients Grab Every Last Dollar of Benefits.
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Worker Classification in the Gig Economy With one-third or more of Americans working as freelancers, the traditional factors for classifying workers as employees or independent contractors are becoming obsolete. Here’s what tax practitioners need to know about changing employment relationships in the gig economy. To read the full article in The Tax Adviser, click: Worker Classification and the Evolving Service Delivery Model.
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How to Determine Household Workers’ Tax Status The so-called “nanny tax,” which actually applies to any form of household employment, can be complicated for clients to deal with. A client is treated as an employer if he or she pays more than $2,000 to a household worker per year. Whether that worker is an employee or an independent contractor depends on the nature of the business arrangement. Karen DeMasters, of Financial Advisor, explains how to handle this often tricky situation. To read the full article in Financial Advisor, click: Complicated Nanny Taxes Can Trip Up Families.
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Get Top Value When Selling an Accounting Firm Avoiding these seven key misconceptions can help you avoid getting less than your firm is worth. Harry L. Olson, president of Accounting Broker Acquisition Group Inc., discusses the misconceptions and what pitfalls to look out for. To find out more about this Journal of Accountancy article, click: Maximize Proceeds in Accounting Firm Sales.