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Written by: Sidney Kess, CPA, J.D., LL.M.

Published: 15 November 2012

This year has seen the occurrence of dramatic casualty events across the country, from tornados in the Midwest, to wildfires in Colorado, Oklahoma, and Texas, to Hurricane Isaac in the Gulf Coast. These and other casualty events have resulted in billions of dollars in property damage. Hopefully, individuals and businesses impacted by these events carried sufficient insurance, including special flood insurance, to be compensated for their property losses.

However, when casualty losses exceed insurance recoveries, tax deductions afford some financial relief to affected taxpayers. Refunds may even be available to provide cash that is helpful for rebuilding after severe losses. What’s more, in some cases, taxpayers can also have more time to complete their tax obligations.

Tax-deductible losses

1. For tax purposes, a casualty loss is damage to property resulting from a casualty event such as a fire, storm, or other sudden or unusual event (Code Sec. 165(c)(3)). It is up to the taxpayer to prove that the damage resulted from a casualty, which is not difficult to do when an event affects a large area.

2. It becomes more challenging when the event is limited to a single taxpayer, such as fire to a taxpayer’s residence. In this case, it is advisable for the taxpayer to keep records that will prove a casualty was responsible for property damage, such as “after” pictures, insurance claims, police reports, and news accounts of the event.

3. For nonbusiness (personal) property, the loss is lesser of the adjusted basis of the property (typically cost) or the difference between the property’s value before and after the disaster. The loss is reduced by any insurance and other reimbursements and by $100. Then total losses for the year are deductible as an itemized deduction to the extent they exceed 10% of adjusted gross income (AGI).

Non-business Casualty Loss Worksheet:

Adjusted Basis                                             ________ (a)

Value Before Loss                                         ________ (b)

Value After Loss                                           ________ (c)

Difference                                                   ________ (d)

Lesser of (a) or (d)                                       ________(e)

Less: Insurance proceeds                              (________)

and other reimbursements                             (________)

Less                                                            (   $100    )

Net                                                              ________ (f)

10% of AGI                                                  ________ (g)

Any  excess of (f) over (g)                              ________

is deductable as an itemized deduction.

4. Losses to business or investment property are fully deductible; they are not reduced by $100 and are not subject to the 10%-of-AGI limit. For property that is totally destroyed and not covered by insurance, the loss is the property’s adjusted basis. Where property has been expensed or fully depreciated, this means a zero basis so no tax loss can be claimed.

Disaster losses

5. If the loss occurs within an area declared eligible for federal disaster relief from the Federal Emergency Management Agency (FEMA), then there is a helpful tax option to consider. The loss can be claimed on a tax return for the year of the casualty event or for the prior year (Code Sec. 165(h)). Claiming the loss for the prior year entitles a taxpayer to receive a tax refund, which can be used to help rebuild after the disaster. The IRS lists areas qualifying for this disaster relief at www.irs.gov/uac/Tax-Relief-in-Disaster-Situations.

To claim the loss on a prior year return, take the loss into account if the return has not yet been filed. If the return has already been filed, then an amended return is required.

Problem areas in casualty losses

6. One of the more difficult matters in claiming a casualty loss is proving the amount of the loss. If there is a complete destruction of the property, the loss is limited to the lower of the fair market value of the property immediately before the destruction or its adjusted basis. If there is merely damage to property, the loss is limited to the lesser of the fair market value of the property immediately before the casualty, reduced by its fair market value immediately after the casualty, or the property’s adjusted basis.

Fair market value usually is ascertained by an appraisal made by a “competent” appraiser (Reg. §1.165-7(a)(2)(i)). The appraisal must take into account the effects of any general market decline affecting undamaged as well as damaged property, which may occur simultaneously with the casualty event.

7. The IRS and courts are rather particular about whether an appraisal is acceptable for proving fair market value. In one recent case, the Appellate Court for the Ninth Circuit affirmed a Tax Court decision that rejected the taxpayers’ claimed casualty loss deduction (Sykes, CA-9, 2012-2 USTC ¶50,485, aff’g TC Memo 2010-84). The taxpayers in this case sustained water damage to their home from a busted water pipe and received an insurance reimbursement of about $4,300 based on the cost of repairs to the damaged property in the home. They hired someone as a qualified appraiser. The taxpayers adjusted the numbers presented by this appraiser and then claimed that the casualty caused a reduction in the value of their home of more than $45,000 and they deducted another $40,000 or so in losses.

8. The taxpayers’ adjustments to a qualified appraiser’s report (believing values to be overstated in the report) do not amount to a qualified appraisal and cannot be used as a basis for a casualty loss deduction. The taxpayers did not call any witnesses nor testify themselves to substantiate the valuation of their claimed loss; they did not submit any supplemental materials to establish that their estimation of the loss should be used for tax purposes.

9. Instead of obtaining an appraisal, the cost of repairs to the damaged property is acceptable evidence of the loss in value if (Reg. §1.165-7(a)(2)(ii)):

1. The repairs are necessary to restore the property to its pre-casualty condition,

2. The amount spent for repairs is not excessive,

3. The repairs relate only to the damage suffered in the casualty, and

4. The value of the property after the repairs does not exceed its value immediately before the casualty.

Only the amount of the loss is deductible. No deduction can be claimed for a sentimental or ascetic loss.

10. Another issue is the tax treatment of reimbursements from state funds as compensation for property damage. The IRS says (www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/FAQs-for-Disaster-Victims---Taxable-State-Recovery-Payments) that if a taxpayer claimed a casualty loss deduction and, in a later year, receives reimbursement for the loss, the taxpayer reports the amount of the reimbursement in gross income in the tax year it is received to the extent the casualty loss deduction reduced the taxpayer’s income tax in the year in which the taxpayer reported the casualty loss deduction; the taxable amount is determined under the tax benefit rule (Code Sec. 111).

11. If the reimbursement exceeds the amount of the casualty loss deduction, the taxpayer reduces basis in the property by the amount of the excess; the taxpayer includes such excess in income as gain to the extent it exceeds the remaining basis in the property, unless such gain is excludable from income or its recognition can be deferred as gain from an involuntary conversion under Code Sec. 1033.

12. Yet another concern for victims of casualty events is the loss of their tax records. Reconstruction of tax records in this situation is permissible, and in fact necessary, to help taxpayers prove their casualty loss deductions. It may be advisable to store tax and financial records so they will not be impacted by a disaster (e.g., using off-site backup for computer files).

Other tax relief for disaster victims

13. From time to time, disasters are so severe that the IRS gives affected individuals and businesses more time to file returns, pay taxes, and do other time-sensitive tax chores. Recently, the IRS granted relief to certain victims affected by Hurricane Isaac (IR-2012-70, 9/5/12). Affected individuals and businesses have until January 11, 2013, to file 2011 returns that were on extension, which includes corporations and other businesses that would normally have filed by September 17, 2012, and individuals who would have filed by October 15, 2012.

14. The IRS cannot extend the time for depositing taxes or filing employment and excise tax returns. However, it can provide relief, as it has done for affective individuals and businesses. The IRS will also abate any interest, late-payment or late-filing penalty that would otherwise apply to these returns. In addition, for businesses the IRS will waive failure-to-deposit penalties for federal employment and excise tax deposits normally due on or after August 26, 2012, and before September 10, 2012, if the deposits are made by September 10, 2012.

As of now, this relief applies only to victims within Louisiana (Ascension, Jefferson, Lafourche, Livingston, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist and St. Tammany parishes) and Mississippi (Hancock, Harrison, Jackson and Pearl counties), but the IRS is expected to extend this relief soon to other storm-related victims.

Conclusion

15. The IRS has a new landing page on disaster assistance and emergency relief for individuals and businesses at www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Disaster-Assistance-and-Emergency-Relief-for-Individuals-and-Businesses-1.

Sidney Kess, CPA, J.D., LL.M., has authored hundreds of books on tax-related topics. He probably is best-known for lecturing to more than 700,000 practitioners on tax and estate planning.

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Written by: Sidney Kess, CPA, J.D., LL.M.

Published: 30 October 2012

As summer wanes and autumn arrives, businesses and their owners would like to plan now to save on their 2012 taxes as well as to get ready for the coming year. The problem: many of the tax rules for 2012 and 2013 are not yet known. More than 50 tax rules expired at the end of 2011. The Bush-era tax cuts, as well as the payroll tax reduction for workers, are set to expire at the end of 2012.

The House passed the Job Protection and Recession Prevention Act of 2012 to extend the Bush-era tax cuts through 2013 (H.R. 8). The Senate Finance Committee also approved the Family and Business Tax Cut Certainty Act of 2012 to extend various tax rules for 2012 (and in many cases for 2013 as well) that had expired at the end of 2011 (no bill number has been assigned). Congress is currently on its summer recess and, no doubt, upon its return in September will be focused on the November election. Here is a roundup of some planning that businesses can do now, as well as alerts to potential opportunities in the pending legislation that may be enacted in the lame duck session after the election.

Distribute profits as dividends

Corporations can make dividend distributions to shareholders. While the dividends are not deductible by the corporation, they are taxed at favorable rates for individuals. Through 2012, the maximum rate for qualified dividends received by individuals is 15% (zero for those in the 10% or 15% tax bracket). This special tax treatment for dividends is set to disappear after 2012 so that dividends would be taxed as ordinary income at rates up to 35% or possibly higher. The special tax treatment could be retained after 2012 through Congressional action.

Corporations sitting on profits for the year can take advantage of the certainty regarding the tax treatment of dividends made in 2012 by making dividend distributions before the end of the year. S corporations need to exercise special caution to avoid disproportionate distributions that have the effect of creating a second class of stock and terminating the S election.

For dividends made to owner-employees, there is an added advantage. These distributions are not subject to payroll taxes. If the same cash from corporate profits had been used to pay these individuals additional compensation, the payments would be deductible as compensation, but also subject to payroll taxes, both for the corporation and the owner-employee.

Take advantage of Section 1202 opportunities

Through the end of this year, certain C corporations can offer stock that enables investors to obtain tax-free treatment for gains as long as they hold the stock for more than five years (Code Sec. 1202). While this rule may be extended beyond 2012, companies seeking equity financing now can take advantage of the tax certainty for this year. It typically takes three to four months to close a deal, so action in this regard should be pursued now.

The 100% exclusion of gain on the sale of Sec. 1202 stock, called qualified small business stock, can only be used by a C corporation in certain industries, including technology, manufacturing, retail and wholesale. Also, the gross assets of the corporation at the time immediately before and after the issuance of the stock cannot exceed $50 million.

Sec. 1202 stock can be given as bonuses to employees. Qualifying businesses should explore this avenue of reward for purposes of year-end bonuses.

If this provision is not extended, the exclusion drops to 50% of gain on the sale of qualified small business stock. Whether this reduced exclusion will be meaningful depends on what the capital gains rates will be at the time such stock is sold (in 2018 or later years).

Find more guidance on Sec. 1202 stock in IRS Publication 550, Investment Income and Expenses, at www.irs.gov/pub/irs-pdf/p550.pdf.

Invest in machinery and equipment

The tax law provides incentives to businesses for buying computers, furniture, machines, and other equipment in two forms: a first-year expensing deduction (Sec. 179) and bonus depreciation (Sec. 168). Both of these tax breaks enable businesses to recover their outlays for these items more rapidly than by using regular depreciation. Both types of tax breaks apply for 2012. However, at this time, it is uncertain what the limitations on these breaks will be. Without any Congressional action, here are the applicable tax rules:

- The Sec. 179 deduction for 2012 is limited to $139,000 of new or used equipment placed in service this year, provided that the business is profitable.

- Bonus depreciation is limited to 50% of the cost for new (not used) property, regardless of the business’ profitability.

It is possible that these rules will yet be liberalized for 2012 (e.g., the Sec. 179 deduction may be increased to $500,000, which was the limit for 2011, and bonus depreciation could be increased to 100%, which was also the limit for 2011). Companies may want to review their spending budgets for the year in light of current and potential tax breaks.

Charitable contributions

Businesses that want to make donations of cash or property to charity can begin to plan their giving for 2012. Donations usually depend not only on what the businesses can afford, but also on tax incentives for giving. At present, only basic tax rules on giving apply because various enhanced deductions expired at the end of 2011. Here are the applicable rules:

- For C corporations, donations are capped at 10% of taxable income.

- For owners of S corporations, partnerships, and sole proprietorships, deductions are taken into account on the owners’ personal returns. The amount of their deductions depends on the owners’ adjusted gross income and the type of donations involved.

Stay alert to last-minute extensions of enhanced deductions for such donations as food inventory, computers to schools and libraries, and conservation easements.

Set up retirement plans for 2012

The contribution limits and other rules for qualified retirement plans are set for 2012; there is no uncertainty. The limits will be indexed for inflation in 2013. Businesses can opt to adopt a qualified retirement plan for 2012 if it does not have one. The deadlines for adoption:

- October 1, 2012, for SIMPLE plans for small businesses. Small businesses that are started up after this date have until it is practical to adopt a plan. A plan adopted after this date is not effective for the current year.

- December 31, 2012, for most qualified retirement plans, including profit-sharing plans (with or without 401(k) features) and defined benefit (pension) plans.

- April 16, 2013 (or October 15, 2013, for business returns on extension) for SEP plans for 2012.

If plans are set up by the required date, which means that the paperwork has been completed with the financial institution managing the plans, then employers have until the extended due date of their returns to make 2012 contributions.

Examine basis for owners of pass-through entities

If 2012 is shaping up to be a bad year for the business, owners of S corporations, partnerships, and limited liability companies can only deduct the portion of the loss passed through to them to the extent of their basis. Early planning for basis can ensure that there is a sufficient amount to enable the full loss to be taken on 2012 returns.

S corporation shareholders, for example, can loan money to their corporations to increase or establish basis in loans; they can then take passed-through losses to the extent of this basis. However, merely guaranteeing third-party loans to the corporation does not create basis. Basis in this case is created only when and to the extent shareholders are called upon to pay this corporate debt.

Revise FSAs for 2013

The Patient Protection and Affordable Care Act of 2010 placed a cap on the amount of salary that employees can contribute to their company’s flexible spending accounts (FSAs) starting in 2013. The cap is $2,500; it will be indexed for inflation after 2013. Until now, the cap was set by companies and averaged $5,000.

Companies technically have until the end of 2014 to revise their FSA documents to reflect the new cap. However, the plans must be operated in conformity with the new law starting in 2013.

Businesses should plan now to inform employees about the new limitations. They should also update payroll systems if they handle payroll internally; outside payroll companies will undoubtedly be prepared for this change.

Conclusion

CPAs should meet with their business clients to assess their current tax picture and to devise strategies for optimizing tax savings for the year. They should also pay attention to developments in Congress that could favorably impact tax-saving opportunities for 2012.

Sidney Kess, CPA, J.D., LL.M., has authored hundreds of books on tax-related topics. He probably is best-known for lecturing to more than 700,000 practitioners on tax and estate planning.

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Written by: Sidney Kess, CPA, J.D., LL.M. Of Counsel, Kostelanetz & Fink, LLP, New York, NY

Published: 10 August 2012

The U.S. Supreme Court declared the individual mandate in the Patient Protection and Affordable Care Act of 2010 (“Affordable Care Act”) to be constitutional (NFIB v. Sebelius, S.Ct., 6/28/12). This provision, which is set to take effect in 2014, is the linchpin for the entire law. As a result, several tax rules became effective in 2012 or are set to become effective in 2013. These rules affect both individuals and businesses. While political changes from the November 2012 election may disrupt the schedule, here are the rules as they now stand.

Additional Medicare taxes

Starting in 2013, two new—additional—Medicare taxes are set to take effect; one impacts earned income while the other affects unearned income.

Additional Medicare tax on earned income. A tax of 0.9% applies to earnings from wages (including tips and taxable fringe benefits) or self-employment over a threshold amount (Code Secs. 1401(b)(2); 3102(f)). The tax applies to earnings over:

- $200,000 for singles and heads of households

- $250,000 for married filing jointly

- $125,000 for married filing separately

Employers must withhold the tax from wages when earnings exceed the threshold. The IRS has guidance (www.irs.gov/businesses/small/article/0,,id=258201,00.html) on withholding rules for employers in question and answer format. For example, if an employee receives a year-end bonus that pushes her over the threshold, the additional Medicare tax is not withheld until the bonus is paid and then only to the extent of the bonus that puts total compensation for the year over the threshold. The additional Medicare tax is on top of the basic Medicare tax of 1.45% for the employee and 1.45% for the employer. There is no employer matching of this additional Medicare tax as there is for the basic Medicare tax. The IRS has said it will revise Form 941, Employer’s Quarterly Federal Tax Return, to reflect the new tax.

Self-employed individuals will have to take this additional tax into account in figuring estimated taxes. For purposes of deducting a portion of self-employment tax from gross income, special computations will be necessary because only the so-called employer portion of the tax is deductible; there is no employer matching for the additional Medicare tax (viewed as the employee portion of the tax).

Additional Medicare tax on net investment income. A tax of 3.8% applies to net investment income (investment income in excess of investment expenses) (Code Sec. 1411). The tax applies to all such income once the taxpayer’s modified adjusted gross income (AGI without the foreign earned income exclusion or housing exclusion) exceeds the applicable threshold amount:

- $200,000 for singles and heads of households

- $250,000 for married filing jointly

- $125,000 for married filing separately

Investment income includes interest, dividends, annuities, royalties, rents, and capital gains. For example, when a taxpayer sells a personal residence, the home sale exclusion continues to apply (Code Sec. 121). However, if there is any gain in excess of the applicable exclusion limit ($250,000 for singles; $500,000 for joint filers), the excess is treated as investment income for purposes of the 3.8% tax. Investment income also includes passive income from an S corporation, partnership, or limited liability company.

Investment income does not include income from these entities if the owner participates in the business. It does not include distributions from IRAs and qualified retirement plans, tax-exempt interest, and nontaxable veteran’s benefits.

There is no withholding for this additional tax. Taxpayers will have to take the additional tax into account when figuring withholding from wages or estimated taxes.

FSA limits

Another rule that takes effect in 2013 is the new federal law cap on the annual salary reduction contribution to a flexible spending account (FSA); it will be set at no more than $2,500 (Code Sec. 125(i)). Previously the annual cap was fixed by the employer, many of which had a substantially higher annual limit. After 2013, the $2,500 will be adjusted for inflation.

Recent IRS guidance (Notice 2012-40, IRB 2012-26, 1046) provides some clarifications on medical FSA rules for 2013. Here are some key points:

- Limit applies per employee. If spouses work for the same employer, each is eligible to contribute up to $2,500 to the company’s medical FSA).

- Employee not barred from multiple contributions. If an employee works for two companies and is eligible to participate in each company’s medical FSA, he or she can contribute up to the limit in each plan. Thus, such worker could contribute up to $5,000 (if each plan allows the maximum federal contribution amount).

- Employer contributions do not limit employee contributions. If the company adds money to an employee’s FSA (not a typical situation), the employee can still contribute up to $2,500.

- Cap limited to medical FSAs. It does not apply to employee contributions to health savings accounts (HSAs), dependent care FSAs, or cafeteria plan contributions.

- Plan amendments. Plans must be amended to reflect the $2,500 cap no later than December 31, 2014. However, they must be operated in conformance with the cap in 2013, even though an amendment has not yet been made.

Itemized medical deduction

Also starting in 2013, the adjusted gross income threshold for itemizing medical deductions increases to 10%; currently it is 7.5% (Code Sec. 213(a)). However, those who are 65 or older can continue to use the 7.5% threshold until 2017 (Code Sec. 213(f)).

The same limit applies for purposes of the alternative minimum tax (Code Sec. 56(b)(1)(B)).

This limitation, combined with the restriction on medical FSAs, means that more individuals will pay out-of-pocket for medical costs without any tax relief. From a tax-planning perspective, consumers may want to spend on discretionary medical costs, such as extra glasses or prescription sunglasses, before the end of 2012 to maximize the current medical deduction if they do not expect to be able to itemize medical costs in 2013.

Medical Loss Ratio

One rule that has already become effective concerns a new concept for many consumers called the medical loss ratio. Policyholders may receive rebates from insurance companies in 2012 because of the insurers’ failure to meet the medical loss ratio. The medical loss ratio is the percentage of premiums that federal law requires insurers to spend on medical care and other health activities as opposed to salaries, advertising, and other administrative costs. More specifically, the medical loss ratio is figured by dividing health care claims and quality improvement expenses by the insurers’ premium income minus taxes and regulatory fees (with certain additional adjustments). Insurers that spend less than the required ratio on medical care must give rebates to policyholders.

Federal law sets the ratio at 80%/20% for individual health insurance policies and groups (“small groups”) with fewer than 50 employees (unless a state elects to use a limit of 100). Starting in 2016, the small group limit is 100.

The ratio for large groups (groups larger than the small group limit) is 85%/15%. Some states already had ratios in place prior to the Affordable Care Act, and they can retain their ratios if they obtain an exemption from federal rules. States are allowed to adopt their own stricter rules, requiring insurers to spend a greater percentage of premiums on medical claims and activities.

Rebates by insurers must be made with respect to their activities in 2011. Policyholders must receive rebate checks or be given premium adjustments no later than August 1, 2012. The Kaiser Family Foundation estimates (www.kff.org/healthreform/upload/8305.pdf) that rebates will total $1.3 billion this year.

The IRS has provided guidance on the tax treatment of rebates resulting from the medical loss ratio in FAQs (www.irs.gov/newsroom/article/0,,id=256167,00.html). Generally, the tax treatment of the rebates is no different from any other recovery under the tax benefit rule (Code Sec. 111). For consumers with individual policies, if deductions were taken for premiums in 2011—as itemized deductions or, for self-employed individuals, as deductions from gross income—then rebates are taxable to the extent of any tax benefit. The fact that rebates are paid in cash or used to reduce current premiums has no impact on the tax treatment. Consumers who receive rebates in 2012 but claimed the standard deduction in 2011 are not taxed on the rebates.

Employees who paid some or all of the premiums for group health insurance through salary reduction arrangements (i.e., with pre-tax dollars) and who receive rebates are treated as having additional wages. They are not only taxable, but also subject to payroll taxes. Employees who paid for coverage with after-tax dollars are treated in the same way as consumers—they are taxable if they received a tax benefit in 2011 for the premiums.

Conclusion

Many of the new tax rules arising under the Affordable Care Act have yet to be fleshed out. The IRS has promised more guidance in the future (presumably it was waiting until the Supreme Court’s decision before investing considerable resources in implementing the law).

Sidney Kess, CPA, J.D., LL.M., has authored hundreds of books on tax-related topics. He probably is best-known for lecturing to more than 700,000 practitioners on tax and estate planning.

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Written by: Sidney Kess, CPA, J.D., LL.M.

Published: 01 August 2012

Do you or your clients have household help? A nanny or babysitter? Cleaning person, domestic worker, or caretaker? Health aide or private nurse?

Numerous times in the past, the subject of household help has made national headlines – most notably concerning political figures who faced violations that surfaced regarding proper hiring and tax withholding guidelines for domestic employees.

In a complex world, household employees can help simplify our lives. But, the payroll tax implications associated with a household employee can be complicated. To avoid the headaches of reporting all of the necessary data, many employers of household help often hire workers “off the books.” However, is it worth the risk?

The Internal Revenue Service continues to scrutinize the proper employment of household employees. There is no statute of limitations for failure to pay household employment taxes. Therefore, a household employee could file for social security and unemployment benefits, etc. many years down the road. In addition to owing back taxes if caught, employers could also face significant fines, penalties, and interest charges. And, in some instances blatant employment violations could also compromise the professional licenses of some employers.

As a trusted advisor to your clients, it is best to share the reality of household employer responsibilities and the importance of this worker classification at the onset of the employment relationship, to help avoid financial risk in the future. Reporting household employee wages and paying employment taxes is the law. It is also the right thing to do for the household help to ensure they are receiving the appropriate benefits and protections as a worker. Therefore, it may simply not be worth the risk – it is best to pay household employees the proper way – “on the books.”

This material identifies federal requirements for household employees. For federal information, including information on determining if the person(s) hired is considered an employee for employment tax purposes, visit the Internal Revenue Service (IRS) website (www.irs.gov) and see Publication 926, Household Employer’s Tax Guide. Additionally, more information on employee status can be found in the Fair Labor Standards Act, on www.dol.gov.

Conclusion

Managing household taxes and payroll responsibilities may be a complex process for busy families. This is why some people are inclined to pay household help “off the books.” But, as pointed out, this is not a wise decision. To avoid the headaches with paying a household employee, some people hire the employee directly from an employment agency. Or, as an alternative, you can use a payroll company such as Paychex.

Paychex helps employers comply with required forms, deadlines, taxes, and keep abreast of relevant payroll and tax information legal related to household employment.

More information and tools on household employer requirements including a CPE seminar on this topic can be obtained through Paychex. Please visit paychex.com for more details and to schedule a seminar.

Sidney Kess, CPA, J.D., LL.M., has authored hundreds of books on tax-related topics. He probably is best-known for lecturing to more than 700,000 practitioners on tax and estate planning.