Business Law

Tuesday, July 10, 2018

Estate Planning for Small Business Owners

What unique considerations exist for business owners when creating an estate plan?

Business owners wear many hats. As a small business owner, you are a general manager, advertising and marketing manager, therapist, copywriter, accountant, and much more. You play a vital role in your business’ success, and it is critical that you take steps to ensure your business will continue to thrive after your death. Without an estate plan in place that contemplates the needs of the business, your death could result in the end of the business. Our


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Monday, July 2, 2018

What's New With Your Company's Retirement Plan


By: Danny Broaddrick, ERISA/Qualified Plan Counsel

 

Recent legislation has impacted various aspects of many qualified retirement plans such as 401(k), profit sharing and even defined benefit (pension) plans to some degree. Some of the significant changes to note are as follows:


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Monday, March 26, 2018

Offering a 401K Plan for Your Employees


Do I need to match my employee’s 401K contributions?

The U.S. Small Business Administration reports that 72 percent of small businesses do not offer an employer-sponsored 401K plan.  The universal lack of employer-sponsored retirement plans is leaving the average American without savings to support themselves in their old age. Many employers shy away from offering a retirement plan for their employees because they fear it will cost too much and take too much time.
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Wednesday, February 24, 2016

Health Insurance Subsidies ay Affect Tax Refunds for Millions

How will Obamacare directly affect you’re your tax return?

The government-subsidized health program instituted by the Obama administration has allowed millions to obtain health insurance. Most of those who signed up for Obamacare, however, were unaware of the long-term tax consequences involved. For many, it is now coming to light that the income estimate they provided to the government when signing up for the program may affect their tax refund.

Those people who underestimated their income during the application process may be receiving too much of a subsidy. This problem even exists for those who estimated correctly at the time but are now making more money. If a person is receiving too much of a subsidy, he or she will have to pay back this money to the government. Where will this refund come from? Out of your income tax refund.

This can be a major problem for those expecting to receive a certain amount back in their tax refunds. Because the tax-related risks are just now becoming apparent for many, it is unlikely that the people affected by this situation were able to use tax planning to lessen the blow. One way to diminish the amount a person might owe is to report the difference in income to the government right away. This will likely lead to higher insurance premiums throughout the year, but will reduce the amount owed at tax time.

The amount that the government can request back from any one taxpayer or family is capped for most. Only those who make over four times the federal poverty level will be liable for an uncapped amount. The IRS can also use any means to collect the amount owed, including tax liens and levies. This means that if a person does not receive enough in his or her tax refund to cover the liability, he or she will have to pay the amount out of pocket.

If you are interested in tax planning in relation to Obamacare or concerned about tax planning for any other reason, you should speak with a qualified Little Rock, Hot Springs and Conway tax planning attorney today.


Wednesday, June 10, 2015

De minimis According to the IRS

Lawyers have a tendency to casually toss Latin phrases into everyday conversation. De minimis is one of those Latin phrases. It means “concerning minimal things.” The IRS allows employers to exclude the value of de minimis benefits provided to employees from the employees’ wages. A de minimis benefit is any property or service that employers provide to employees that has so little value that accounting for it would be unreasonable or administratively impracticable.  

In short, the government doesn’t want to force employers and employees to spend countless hours figuring out just how much the hotdogs each employee ate at the annual company picnic were worth, but it does want to ensure that employers aren’t able to disguise compensation as small side benefits and thereby get away with not paying taxes on it, so it adopted a policy of not taxing de minimis benefits.  

The IRS lists the following as examples of de minimis benefits:    

  •  Controlled, occasional employee use of photocopier  
  • Occasional snacks, coffee, doughnuts, etc.
  • Occasional tickets for entertainment events
  • Holiday gifts that have little monetary value
  • Occasional meal money or transportation expense for working overtime
  • Group-term life insurance for employee spouse or dependent with face value not more than $2,000
  • Flowers, fruit, books, etc., provided under special circumstances
  • Personal use of a cell phone provided by an employer primarily for business purposes

The key is the value and the frequency of the benefit, and it is very fact-specific, so it is important not to generalize based on the examples above.   

Something the IRS is very clear about is that cash and cash-like items such as gift cards can never be considered de minimis. This is because they are not difficult to account for, even in small amounts.       

If you have questions about the taxability of fringe benefits, please contact  experienced attorneys at Hyden, Miron & Foster, PLLC,  at 501.482.1787 or 888.770.1848. Our offices are conveniently located in Little Rock, Conway, and Hot Springs Village.

 


Friday, August 22, 2014

Is the new IRS Form 1023-EZ really “EZ”?

By: Tiffany Parker Nutt 

The IRS recently announced a new Form 1023-EZ that is available for small organizations seeking tax-exempt status. The new form provides a simplified application process and is expected to reduce application backlog. However, not all organizations seeking tax-exempt status can use Form 1023-EZ. It can only be used by organizations seeing tax exempt status under IRC § 501(c)(3). IRC § 501(c)(3) applies to entities organized exclusively for religious, charitable, scientific, testing for public safety, literary, educational purposes, or for the prevention of cruelty to children or animals. The new form cannot be used by organizations with annual gross receipts exceeding $50,000.00 or with total assets exceeding $250,000.00.

Form 1023-EZ can only be filed electronically at www.pay.gov after you register for an account with that site. The IRS will not accept printed copy submissions of the application. Also, the electronic application will not be processed until the $400 user fee is paid. The user must be paid online also.

The IRS states that the new “EZ” form (3 pages) is shorter than the full Form 1023 (12 pages). However, instructions for Form 1023-EZ require that applicants must complete a seven page Eligibility Worksheet first. Applicants do not have to submit the Eligibility Worksheet with the Form 1023-EZ applications, but need to keep a copy for their records.

Form 1023-EZ only contains four parts. Part I is general information about the organization. Part II is a series of “check the box” items attesting that the organization document meets certain requirements. Part III relates to the organization’s specific activities. Part IV is a series of questions to determine whether or not the organization is a private foundation or public charity.

Even though the Form 1023-EZ is easier than the full Form 1023, the application limitations and questions are still very complicated. Contact the attorneys at Hyden, Miron & Foster, PLLC to assist with your tax-exempt status application and organization formation.


Thursday, July 17, 2014

Arkansas Nonprofits Obtain Needed Funds in 2013

In December, Little Rock-based newspaper Arkansas Times released its list of high-value grants received by Arkansas non-profits from Arkansas foundations for 2013. Numerous nonprofits that were able both to identify the need for funds and to demonstrate the ability to successfully utilize funds received, in many instances, six, seven and even eight-figure grants from such foundations as Walton Family Foundation, Walton Charitable Support Foundation, The Windgate Charitable Trust, The Care Foundation of Springdale, The Endeavor Foundation, The Schmeiding Foundation and The Donald W. Reynolds Foundation. Recipients included:

• The Arkansas Community Foundation, $21.4 million
• Food Bank of Northwest Arkansas, $7.1 million
• Jones Center for Families, $500,000
• Teach for America-Arkansas, $1.9 million 
• Nature Conservancy of Arkansas, $500,000
• Arkansas Children's Hospital, $400,000

In all, Arkansas foundations contributed over $200 million in grants to nonprofits throughout Arkansas in 2013.

If you represent an Arkansas charitable organization or other nonprofit organization such as a high school, university, church, hospital or museum, or if you represent a foundation located in Arkansas or another state, obtain qualified legal help by contacting the law firm of Hyden, Miron & Foster with offices in Little Rock, Conway and Hot Springs Village. Our charitable and non-profit clients include both small private family foundations and national charities. We provide a broad range of legal services related to charitable work, including:

• Incorporation
• The preparation and filing of documents and application for tax-exempt status
• Administration issues 
• The termination of organizations
• Mergers with other organizations
• Organizational strategy and planning

In addition to working with organizations, we work with individuals and families who wish to incorporate charitable giving into their estate planning. We handle trusts including charitable remainder annuity trusts, charitable remainder unitrusts and charitable lead trust, and can provide legal assistance on matters ranging from beneficiary designations to selecting the timing and type of charitable gifts, so that both our client and the charitable organization obtain maximum benefit.

Our established firm has provided estate and business planning legal services to hundreds of families and organizations located throughout Arkansas. To discuss your legal questions and needs with an experienced attorney, call 501.673.8222.

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