Tax Benefits: Home Mortgage Interest Deduction for Unmarried Couples

The Ninth U.S. Circuit Court of Appeals recently ruled that unmarried individuals who purchased a home together are eligible to a home mortgage interest deduction for up to $1.1 million in debt each.

A new post Tax Benefits: Home Mortgage Interest Deduction for Unmarried Couples – http://taxtrustestatenews.com/tax-benefits-home-mortgage-interest-deduction-for-unmarried-couples/ has been published on September 23, 2015 at 11:22 am.

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New Department of Labor Proposal for Overtime

New Department of Labor Proposal for Overtime

 

The U.S. Department of Labor (DOL) issued a proposed rule on June 30, 2015 that would dramatically change the Fair Labor Standards Act’s (FLSA) overtime exemptions for “white collar” and highly compensated employees. The proposed rule, among other things, contains the following provisions:

  1. The weekly salary level for the white collar exemptions to the time-and-a-half overtime rule would increase from $455 per week to $970 per week ($50,440 annually);
  2. Total annual compensation to qualify for the highly compensated employee exemption would increase from $100,000 to $122,148; and
  3. Compensation levels to qualify for the white collar and highly compensated employee exemptions would be updated on a periodic basis.

Before becoming final, the DOL’s proposed rule is subject to a 60-day notice and public comment period. The DOL will then issue a Final Rule which may or may not differ from the proposed rule. If the Final Rule mirrors the proposal (as expected), exempt employees earning less than the increased salary levels must be reclassified as non-exempt and be treated accordingly.

Businesses should start planning for the proposed changes and increased costs of complying with the new regulations. Among other things, a review of the salary levels for exempt employees is warranted, as well as the updating (or implementation) of policies regarding the reporting of hours worked and authorization to work overtime.

Rodman E. Honecker

Windels Marx Lane & Mittendorf, LLP

120 Albany Street Plaza, New Brunswick, NJ 08901

Direct Dial: 732.448.2534 | General Fax: 732.846.8877

rhonecker@windelsmarx.com | www.windelsmarx.com

7 Reasons Why Every Business Should Have a Blog

7 Reasons Why Every Business Should Have a Blog

The first weblogs, a name eventually shortened to “blogs”, were introduced in the 1990s. They were basically used to provide an online voice to anyone who had news, gossip or opinions to share.

If a person couldn’t get people to listen to what they had to say in person or in print, maybe they could find an interested audience online.

Early blogs were more like online journals or quasi-news services than the valuable marketing tools and resources of information that they are today.

If you don’t have a company blog, the company blog is dormant, or you’re not blogging frequently, you’re missing a massive opportunity. Here’s why…

1) A blog can improve your search ranking.

Search engines crave content that’s fresh, relevant and valuable. The easiest way to add content to your website on a regular basis without cluttering up the site is with a blog.

The job of a search engine is to fill the need or request of the searcher, whether that person wants to find something, learn something, buy something, fix something or solve a problem. A blog allows you to provide these answers, which is why search engines value quality content so highly.

2) A blog speeds up the sales process.

The sales process can be painfully long. You often have to educate potential customers, overcome obstacles and explain the value of what you do. A blog gives you a platform to do all of the above – in detail, with clarity and without interruption.

3) A blog is permanent.

Every blog post will live online forever unless you delete it or the platform you’re using explodes. That means every blog post is capable of producing leads and driving traffic to your website for years. It also shows that you believe so strongly in something that you’re willing to make a permanent, public record of it. In other words, you’re not just saying something to close a sale.

4) A blog extends your reach.

The wider your net, the more fish you catch. By publishing and sharing blog posts on a regular basis, you reach new people and expand your network. You reconnect with old business contacts. You build a larger social following.

5) A blog builds trust and credibility.

When you use your blog to help and educate instead of sell stuff, it can go a long way towards earning people’s trust and positioning yourself or your company as a thought leader. The more someone trusts you and believes in your expertise, the more likely they’ll be to hire you or buy from you when the need arises.

6) A blog gets beyond the surface.

When it comes right down to it, business is about people dealing with people. A blog allows you to share the personal stories that have helped shape your company, as well as that values that can be a major factor in someone’s purchasing decision. A blog makes your business more likeable, believable and approachable.

7) A blog can be repurposed.

A blog isn’t just a blog. If you want to get the most mileage out of your marketing investment, a blog should be part of the equation. Blogs can be easily converted to videos and podcasts or used for newsletter content. Snippets can be incorporated into sales presentations, brochures, webinars and ads. There’s plenty of juice to be squeezed.

Shore Creative Group can help you launch or restart a blog, optimize each post for search, build a following and generate business leads. Call 732-229-7100 or email mike@shorecreativegroup.com to find out how your company can profit from blogging.

DIVORCES OF NJ LLC MEMBERS

DIVORCES OF NJ LLC MEMBERS

Expelling a recalcitrant, minority member from a New Jersey Limited Liability Company was recently made easier. In IE Test, LLC v. Carroll, 2015 N.J. Super. Unpub. LEXIS 567 (Decided March 17, 2015), the Appellate Division of the New Jersey Superior Court interpreted a rarely litigated provision of the Limited Liability Company Act, N.J.S.A. 42:2B-1 to -70 (the “LLCA”).

In the IE Test case, the members formed the limited liability company, but then quickly fell into fundamental disagreements about how to proceed with the business. The members could not even agree on the terms of an operating agreement, which in turn inhibited the ability of the company to obtain financing. The Appellate Division decided that proof of wrongful conduct was not necessary to expel the recalcitrant minority member. Rather, proof that it is “not reasonably practicable to carry on the business if the member remains” is sufficient. Id. at *14 quoting N.J.S.A. 42:2B-24(b)(3)(c). The expelled member is entitled to recover the fair market value of his ownership interest.

The IE Test case is significant because there is not a published case interpreting the referenced provision of the LLCA, and the flexible test adopted by the Appellate Division provides majority members of a New Jersey limited liability company with a practical tool to expel recalcitrant minority members.

Rodman E. Honecker
Windels Marx Lane & Mittendorf, LLP
120 Albany Street Plaza, New Brunswick, NJ 08901
Direct Dial: 732.448.2534 | General Fax: 732.846.8877
rhonecker@windelsmarx.com | http://www.windelsmarx.com

The So Called New Jersey Exit Tax

THE SO CALLED NEW JERSEY EXIT TAX

The State of New Jersey passed a minimum 2% estimated “income tax” on the sale of real property within the State by non-residences of New Jersey, paid at the time the property is sold. Do not confuse this with any “property sales taxes” that might be due.

The estimated income tax paid is credited to your actual income tax liability due at the time of filing your individual New Jersey Income tax return (NJ 1040). The tax paid is a deposit toward the final income tax liability related to the sale transaction.

Non-resident individuals and non-resident estates or trusts are subject to New Jersey income tax on income received from all sources computed as if the taxpayer was a New Jersey resident (even if you have subsequently relocated), then prorated based on the ratio that the taxpayer’s New Jersey income bears to income from both inside and outside New Jersey. For purposes of determining taxable income during any period of non-residence, gross income includes only New Jersey source income.

Sales of real property

Effective and retroactive to August 1, 2004, non-resident individuals, estates, or trusts who sell or transfer certain real property located within New Jersey are required to pay estimated income tax to NJ. The tax is equal to the amount of the gain, if any, reportable for federal income tax purposes multiplied by the highest applicable gross income tax rate for the taxable year. The estimated tax payment cannot be less than 2% of the consideration for the sale or transfer stated in the deed affecting the conveyance.

A seller is considered a non-resident unless a new residence has been established in New Jersey.

Exemptions.-Exemptions from the payment of estimated gross income tax on the transfer of real property are available if:

*The real property being sold or transferred is used exclusively as the principal residence of the seller or transferor.

*The seller or transferor is a mortgagor conveying the mortgaged property to a mortgagee in foreclosure or in a transfer in lieu of foreclosure with no additional consideration; or

*The seller, transferor, or transferee is an agency or authority of the federal or the     state government, a federal mortgage corporation or association, or a private   mortgage insurance company;

*The seller is not an individual, estate or trust;

*The total consideration for the property is $1,000;

*The gain from the sale is not reportable for federal income tax purposes or is a cemetery plot; or

*The transfer is made by an executor or administrator to effect distribution of a decedent’s estate.

*Sheriffs’ sales; and Bankruptcy trustees’ sales

Overpayment of tax.-a refund may be claimed by the taxpayer if the estimated tax paid exceeds the taxpayer’s actual tax liability for the year. Interest does not accrue on the overpayment amount.

Filing requirements.-a non-resident seller’s estimated tax declaration and associated payment must be given to the buyer at the time of closing.

We understand this is a very confusing set of requirements, but we are here to help you with this and any tax issue.  Give us a call at 732-531-8000 and ask for me directly at extension 225 or e-mail me your questions: salschibell@lrscps.com<mailto:salschibell@lrscps.com>

Sal Schibell, CPA, Partner at Lawson, Rescinio, Schibell & Associates, www.lrscpa.com<http://www.lrscpa.com>

Leaders Need to Ask Questions (By Chris Ruisi / www.chrisruisi.com)

Leaders Need to Ask Questions (By Chris Ruisi / http://www.chrisruisi.com)

Not every leader is that smart that they will have the answers to every question that may arise. In fact, I can make a very strong case, with real life examples, that leaders who have all of the answers are probably the greatest threat to their team and their organizations. But, this point will be the subject of a future Wake Up Call.

Let’s get back to the need for leaders to ask questions. When leaders ask the right questions, they get better responses and information. With better information, they are able to make better decisions which in turn have a positive impact on their teams and organizations.

Here are 7 key questions that every leader should learn how to ask on a consistent basis in order to achieve their goals:

  1. What’s the right thing to do right now for the company?
  2. Based on this “right thing” what is the desired outcome that needs to be achieved?
  3. What are the key tasks related to this “right thing” that need to be acted upon
  4. Who will be responsible for this?
  5. Do they have what they need to get the job done and achieve the desired outcome?
  6. By when will this “right thing” be completed?
  7. How will we evaluate/measure progress?

Clearly there are more questions a leader can and should be asking to measure progress within his or her organization, but these 7 are a great place to start for any leader wishing to raise their performance bar.

Asking questions not only helps a leader learn but, when asked in a genuine way, helps the leader build trust with their team. So ask!

3 Guaranteed Ways to Hire the Wrong People (By Chris Ruisi / www.chrisruisi.com)

3 Guaranteed Ways to Hire the Wrong People (By Chris Ruisi / http://www.chrisruisi.com)

I’m always amazed how everyone agrees that the quality of your team will determine the quality of your business. Yet many still approach the hiring and selection of employees as a burden or something you “have to do”. Well, you have to do it! And you had better be doing it right if you want to avoid mistakes, lost money and productivity and causing your customers to go elsewhere.
So here are 3 sure fired ways to make certain that you continue to hire the wrong employees. Here’s the point (just in case you need to hear it) – do the opposite!

1. Have minimal if any, job specifications. You know, you’re busy. Who has time to write a job description? Had a client tell me once they wanted someone to handle – “Usual admin stuff and customer service”. Yup that was it. You don’t need a full scale job description to hire the right person. The first thing you need to do is confirm that you have to fill the empty position or a different one to better meet the needs of your organization. Far too many of you go blindly through the motions of filling a need without first deciding what the right need is. All you need is a simple description of the essence of the position – how it will contribute to the goals of your organization followed by no more than 6 to 8 key responsibilities. Maybe this will take an hour to do. Is an hour of your time better than the weeks and months of agony you will experience if you hire the wrong person?

2. Don’t ask the right questions. Questions are supposed to get you information. Bad questions get you bad information which lead to a bad hire. In addition to asking questions about what they did (which by the way most of you do), ask questions about what you want them to do – as reflected in the need you have to fill. You are spending way too much time asking about their past. Set specific targets about what you want this new person to do at the end of 30, 60, 90 and 120 days after they come on board and then ask questions about their abilities and desire to meet those targets

3. Hire the person right away. Heck if their breathing that’s half the battle, right? Those of you who know have heard my favorite mantra –“Hire slow, fire fast”. Yet most of you do the opposite – you hire fast and suffer slowly and slowly until you can’t take it anymore. Look, hiring employees is a risky but necessary process. You can never minimize 100% of the risk but you can reduce it so as to be able to make an intelligent (not emotional or stupid) hiring decision. You don’t need a long time to get to the right decision but if you don’t follow an intelligent process, it will have consequences.

Hiring the right people the right way will have a significant positive impact on the growth of your business and your financial security. Hiring the wrong people the wrong way is just really bad.

Confidence = Willingness (By Chris Ruisi / www.chrisruisi.com)

Confidence = Willingness (By Chris Ruisi / http://www.chrisruisi.com)

Many of us talk about confidence; want more confidence and struggle with building and maintaining our self-confidence in the face of the challenges we deal with it every day. To be confident means you’re willing to act to first satisfy yourself (and no one else) that you did your very best.
When I talk about confidence, I frame it up around the concept of your “personal willingness”. Let me explain what I mean. Confidence is your personal willingness to:

1. Keep moving forward towards the achievement of your goals; you are persistent and consistent

2. Put yourself out there for others to see and judge because you know what you’re doing is the
right thing

3. Stick your neck out and take a risk

4. Not to worry about what others think of you

5. Question your status quo before you are forced to “react” to change

6. Learn from your mistakes

7. Try again after you experience a mistake or failure

8. Accept responsibility and accountability for your actions – you own it; fix it; learn from it
and move on

9. Use and consistently practice positive “self-talk” and ignore unfounded negative/destructive
negative feedback

10. Take ACTION as needed with a focused and “get it done” sense of urgency

As you can see, personal willingness involves taking ACTION. Every time you take action you give yourself several opportunities. Some of these opportunities could be – an opportunity to accomplish something; an opportunity to learn something; an opportunity to set new limits for your performance. There are probably others but the most important opportunity is that you build or increase your self-confidence in yourself. This last one is the key to your growth – it gives you that personal willingness to tackle something even greater and stretch your full capabilities. You know, to Step Up and Play Big!

NJ SUPREME COURT ADOPTS BROAD DEFINITION OF “EMPLOYEE”

NJ SUPREME COURT ADOPTS BROAD DEFINITION OF “EMPLOYEE”

The law on classification of workers continues to evolve. On January 14, 2015, the New Jersey Supreme Court in Hargrove v. Sleepy’s, A-70-12, Case No. 0727242, placed the burden squarely on the employer to show that a worker is an independent contractor rather than an employee. The Court adopted the “ABC” test, the most “employee” friendly test available for use in New Jersey Wage and Hour Law cases. Employers may expose themselves to liability for mischaracterizing an employee as an independent contractor, including but not limited to lawsuits and enforcement actions for unpaid overtime. Employers must properly categorize the individuals making up their workforce at the outset of the relationship. In particular, any company doing business in New Jersey utilizing the independent contractor classification should re-examine this classification, with reference to the three part “ABC” test:
(1) that “it neither exercised control over the worker, nor had the ability to exercise control in terms of the completion of the work”;

(2) that the worker performs work outside the usual course of the employer’s business or outside the employer’s place of business; and

(3) that the worker “has a profession that will plainly persist despite the termination of the challenged relationship.”

The failure to prove even one of the three criteria results in a worker being classified as an employee, rather than an independent contractor.

Rodman E. Honecker
Windels Marx Lane & Mittendorf, LLP
120 Albany Street Plaza, New Brunswick, NJ 08901
Direct Dial: 732.448.2534 | General Fax: 732.846.8877
rhonecker@windelsmarx.com | http://www.windelsmarx.com

The New Internal Revenue Repair Regulations

The New Internal Revenue Repair Regulations

Effective January 1, 2014 the IRS issued final regulations that completely revamped the way a business must evaluate certain expenditures in order to determine whether the costs represent immediately deductible repair expenses or capital improvements that must be depreciated over time. In addition new guidance was issued on when a business may deduct material and supplies.

There are different types of material and supplies, and it is the nature of the item that drives when it may be deducted under the new regulations .In the first category, we have “incidental material supplies; ” those items with a cost of less than $ 200 that are so small and insignificant, it is impossible to trace when they are consumed by the business. These expenses may be deducted immediately upon purchase.

In the next category , we have ” non-incidental materials and supplies, ” these items with a value of $200 or less that are a bit more substantial , and we can trace when they are being used for the business . These materials and supplies can only be deducted when consumed by the business. Lastly, there is what is called ” rotable and emergency spare parts,” which are much bigger, more costly supplies, generally well in excess of $ 200 cost. These parts are used to avoid production down time by keeping them on hand until they are used to avoid production down time. As a result the cost is not permitted to be expensed until these parts are finally disposed of.

This new rule which is effective January 1, 2014 basically means that non incidental supplies cannot be deducted until they are used.

The regulations also define and adopt new criteria related to repair costs incurred to maintain an asset.
Basically the old rules determined that if an asset is purchased it was to be depreciated over its useful life. The grey area dealt with how to treat cost incurred to repair the asset. The rules basically provided that if expenditure increased the value of an asset or extended its useful life, the costs had to be capitalized as part of the asset cost rather than be deducted as a repair. Since there was not much guidance and much abuse of these rules the IRS developed new rules, regulations.

The new regulations require that repair costs must first be evaluated utilizing the safe harbor de minims tests , and if they meet these tests the repair costs may be deducted as opposed to capitalized as part of the asset . If the repair does not qualify for the safe harbor exceptions, than the repair costs must be evaluated through a multi step process to determine its treatment; expense or capitalization.
The costs must be evaluated as to whether the costs represent a Betterment, Restoration, or Adaptation for a new and different use, The BRA tests.

In order to make this determination a new criteria was develop by the regulations called a” unit of Property” the Denominator. The unit of property must first be defined before the repair cost can be evaluated. For example; if you were required to compare the $ 20,000 cost to replace an eight of ten HVAC units to the cost of the entire building, there’s virtually no chance the BRA test would conclude that the costs would be capitalized. Under the unit of property rules, however, the comparison is not made to the building, but rather to the “building system” that is comprised solely of the ten HVAC units. As a result, replacing 80% of the building system will require capitalization under the BRA test.

A brief explanation of what a Betterment, Restoration or Adaptation represents is follows.

There are essentially six types of betterments; repair costs to property prior to acquisition must be capitalized as betterment. The remaining five types of betterments are all interrelated. Any costs that represent a material increase to size , capacity , efficiency , strength or quality of a unit of property , a building system , or a segment or a unit of property that performs its own critical and discrete function must be capitalized as part of the property.

Restoration can be divided into three buckets; simply the first situation is the capitalization of repair costs related to the taxpayer taking a loss on the property due to abandonment or casualty. The second situation is where the property does not function for its intended use or is so run down that it can no longer function; the repair costs must be capitalized. The third relates to replacing part of a unit of property e.g. a building system , a portion of a unit of property that performs its own discrete function, the taxpayer replaces a chiller unit in the HVAC .The Regulations have numerous examples for a detailed explanation of the BRA TEST.

In summation a company must request to change its method of accounting for materials and supplies and repair costs unless the company has been applying these rules. For the majority, in order to come into compliance with these rules, a change in accounting method request must be filed with the IRS notifying them of the change commencing with tax year 2014 and making the necessary adjustments to prior tax years. Revenue Procedure 2015-20 has given relief to certain taxpayers that qualify from having to file requests with the IRS and to apply the new Regulations commencing 2014 on a going forward basis.

Submitted by Sal Schibell, Lawson, Rescinio, Schibell & Associates