News & Tech Tips

Filing for an extension isn’t without pitfalls

Kathleen Hargrove on April 8, 2016

filing for an extensionYes, the federal income tax filing deadline is slightly later than usual this year — April 18 — but it’s now nearly upon us. So, if you haven’t filed your return yet, you may be thinking about an extension.

Extension Deadlines

Filing for an extension allows you to delay filing your return until the applicable extension deadline:

  • Individuals — October 17, 2016
  • Trusts and estates — September 15, 2016

Potential Pitfalls

While filing for an extension can provide relief from April 18 deadline stress, it’s important to consider the potential pitfalls:

  • If you expect to owe tax, keep in mind that, to avoid potential interest and penalties, you still must (with a few exceptions) pay any tax due by April 18.
  • If you expect a refund, remember that you’re simply extending the amount of time your money is in the government’s pockets rather than your own.

A Tax-Smart Move?

Filing for an extension can still be tax-smart if you’re missing critical documents or you face unexpected life events that prevent you from devoting sufficient time to your return right now. Please contact Whalen & Company if you need help or have questions about avoiding interest and penalties.

 

Copyright 2016 Thomson Reuters
Image courtesy of freeimpages.com/maximeperrioncaissy

Do you need to file a 2015 gift tax return by April 18?

Kathleen Hargrove on April 7, 2016

gift tax returnYou generally need to file a gift tax return for 2015 if, during the tax year, you made gifts:

  • That exceeded the $14,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse)
  • That you wish to split with your spouse to take advantage of your combined $28,000 annual exclusions, or
  • Of future interests – such as remainder interests in a trust – regardless of the amount.

If you transferred hard-to-value property, such as artwork or interests in a family-owned business, consider filing a gift tax return even if you’re not required to. Adequate disclosure of the transfer in a return triggers the statute of limitations, generally preventing the IRS from challenging your valuation more than three years after you file.

There may be other instances where you’ll need to file a gift tax return – or where you won’t need to file one even though a gift exceeds your annual exclusion. Please contact your Whalen & Company representative for details.

 

Copyright: Thomson Reuters
Image courtesy of freeimages.com/JasonM

CLIENT ALERT: DOL “Overtime Rule” Moves into Final Stages

Kathleen Hargrove on March 28, 2016

This month The United States Department of Labor (DOL) moved forward with a proposed rule to extend overtime protections that could impact 5 million white collar workers.
The DOL sent the final version of its overtime rule, a revision to the Fair Labor Standards Act, to the White House Office of Management and Budget (OMB) on March 15. The OMB is expected to publish a final rule within 30-60 days.
If the overtime rule is finalized by the OMB as proposed, the salary threshold for white collar exemptions would be increased to $50,440 from the current threshold of $23,660.
The increased threshold was determined by the DOL based on the standard salary level at the 40th percentile of weekly earnings for full-time salaried workers.  DOL used salary data from 2013 to determine the threshold ($47,892) and adjusted to the proposed $50,440 for 2016 implementation.
According to the DOL’s website, this exemption threshold has not been updated since 2004 and is due to be revised as “President Obama directed the Secretary of Labor to update the FLSA’s overtime pay protections and to simplify the overtime rules for employers and workers alike.”
Shortly after the final proposed rule was submitted to the OMB, Republican congressmen introduced the “Protecting Workplace Advancement and Opportunity Act” in both the House and Senate. This proposed legislation is intended to prevent the DOL overtime rule from being implemented, require economic climate considerations for the rule and impose additional restrictions on future changes to overtime rules.
Whalen & Company will continue to follow the proposed rule as it progresses.
We hope this information has been helpful to you.  If you have questions about how the proposed overtime rule affects your business, please contact your Whalen & Company representative.
Sources:

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