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Author: Kelly Davis

SIMA Financial Group > Articles posted by Kelly Davis

Employee Benefits Plan Limits for 2021

Many employee benefits are subject to annual dollar limits that are periodically updated for inflation by the IRS. The IRS typically announces the dollar limits that will apply for the next calendar year well in advance of the beginning of that year. This gives employers time to update their plan designs and make sure their plan administration will be consistent with the new limits. Although some of the limits will increase for 2021, most of the limits remain the same. Increased Limits For plan years beginning on or after Jan. 1, 2021, the following limits have increased: Health savings account contributions: Single coverage—$3,600 (up...

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Final Rule on Health Care Transparency Issued

The Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a final rule that imposes new transparency requirements on group health plans and health insurers in the individual and group markets. Specifically, the final rule requires plans and issuers to disclose: Price and cost-sharing information to participants, beneficiaries and enrollees upon request: A list of 500 shoppable services must be available via the internet for plan years beginning or after Jan. 1, 2023. The remainder of all items and services is required to be available for plan years beginning on or after Jan. 1, 2024. In-network...

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PCORI Fee Amount Adjusted for 2021

The Fee is $2.66 per Covered Life for Plan Years Ending in 2021 The IRS issued Notice 2020-84, which increases the Patient-Centered Outcomes Research Institute (PCORI) fee amount for plan years ending on or after Oct. 1, 2020, and before Oct. 1, 2021. Specifically, the PCORI fee amount for plan years ending on or after Oct. 1, 2020, and before Oct. 1, 2021, is increased to $2.66 multiplied by the average number of lives covered under the plan. The IRS provided transition relief related to the 2020 PCORI fee calculation, due to the anticipated termination of the PCORI fee prior to its extension. This transition relief...

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Charitable Giving as part of your Tax Planning Strategy

With the holiday season upon us and the end of the year approaching, we pause to give thanks for our blessings and the people in our lives. It is also a time when charitable giving often comes to mind. The tax benefits associated with charitable giving could potentially enhance your ability to give and should be considered as part of your year-end tax planning. Tax deduction for charitable gifts If you itemize deductions on your federal income tax return, you can generally deduct your gifts to qualified charities. This may also help you potentially increase your gift. Assume you want to make a...

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Your Year-End Tech Check

Wrap up 2020 knowing that your network and hardware are secure and ready for the new year with SIMA Technology's Year-End Tech Check from Chief Technology Officer, Kelly Davis. Review your backup devices and services Commonly, the business backup solutions are as simple as having an external hard drive connected or saving documents elsewhere like a cloud backup. While this is suitable for retrieving single documents as needed, the real problem comes with bigger issues that include theft, natural disasters, or user error. Documents can be saved, but not software and business applications. And the biggest factor with a network failure is...

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1099-NEC: Who should receive them, why proper classification is essential, and how to remediate errors

Form 1099-NEC is due to vendors by Jan. 31 for payments made the preceding year to non-corporate independent contractors. The IRS requires form W-9 to be completed before any payment is made to a vendor. Businesses do NOT have to issue a 1099 to any vendor that indicates on the Form W-9 that they are a corporation unless the payments were to an attorney. Employee or Contractor?  To determine if an individual is an employee or an independent contractor, consider the IRS 3-Factor Test: The Behavioral Test:  Does the company control or have the right to control what the worker does and...

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Form 1099 must be filed and distributed by January 31 for all independent contractors earning $600+

If you pay an individual (who is not an employee) or partnership for “services” rendered and the amount paid for the year is $600 or more, you must file an information return, Form 1099-MISC, with the IRS and provide a copy to the individual. Form 1099s are required to be filed and distributed by January 31. There is a penalty for failure to file by the date or failure to provide the correct identification number. The IRS may charge a $100 penalty for each incorrect identification number. If you do not plan to enter your independent contractor(s) payments in your payroll system...

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This #GivingTuesday… Enjoy tax benefits while helping others

With the holiday season upon us and the end of the year approaching, we pause to give thanks for our blessings and the people in our lives. It is also a time when charitable giving often comes to mind. The tax benefits associated with charitable giving could potentially enhance your ability to give and should be considered as part of your year-end tax planning. Tax deduction for charitable gifts If you itemize deductions on your federal income tax return, you can generally deduct your gifts to qualified charities. This may also help you potentially increase your gift. Assume you are considering making a...

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1099-MISC: Who should receive them, why proper classification is essential, and how to remediate errors

Form 1099-MISC is due to vendors by Jan. 31 for payments made the preceding year to non-corporate independent contractors. The IRS requires form W-9 to be completed before any payment is made to a vendor. Businesses do NOT have to issue a 1099 to any vendor that indicates on the Form W-9 that they are a corporation unless the payments were to an attorney. Employee or Contractor?  To determine if an individual is an employee or an independent contractor, consider the IRS 3-Factor Test: The Behavioral Test:  Does the company control or have the right to control what the worker does and...

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