website and am more confuse now than when I started. b. How is the $25,000 treated for purposes of Federal tax income? The $25,000 that were for expenses will have to be claimed on the tax return as income since they were previous deducted as a business expense and are now be recovered. c. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? I have no idea on how to reduce this income. 2. Jane Smith tax issues: a. What are the different tax
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HOBBY LOBBY VS. THE AFFORDABLE CARE ACT Leonila Gonzalez oUR LADY OF THE LAKE UNIVERSITY HOBBY LOBBY VS. THE AFFORDABLE CARE ACT Leonila Gonzalez oUR LADY OF THE LAKE UNIVERSITY Businesses can be affected by many laws and mandates that are set by the state or federal government. It can be difficult for a small firm to stay in business when such mandates are passed. The Affordable Care Act was signed into law by President Obama on Mach 23, 2010. Key components to the law are improving
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disputes over how far, if at all, the government can step across the boundaries that protect religious affiliations before infringing upon their constitutional rights. Recently, an important legal case called Burwell vs. Hobby Lobby was brought to the attention of the Supreme Court. Hobby Lobby is a family-owned Christian arts and crafts store who felt that the requiring of religious businesses to provide insurance coverage for contraception under the Affordable Care Act violated their rights under
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S Corporation where wages that are paid to the shareholder may be less than the $300,000. The regular income tax rates will apply regardless, but this legal ploy can save some social security taxes which amount to an additional 15.3% (S-Corporations vs. LLC: Income Tax Savings Benefits, 2012). You can reduce the taxable amount of income by fully funding a variety of retirement plans, such as IRAs, SEP-IRAs, profit sharing. Take advantage of Section 179 (IRS, 2012), you can pay as many current
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John Smith worked on a case for more than two years and received a lump sum payment of $300,000 for his work plus an additional $25,000 for pre-paid expenses. He wants to know how this money will be treated for tax purposes. John’s company is what is known as an LLC or Limited Liability Company, and for U.S. federal income tax purposes, an LLC is treated by default as a pass-through entity. Since John is the only person in the company, the LLC is treated as a “disregarded entity” for tax purposes
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was the main argument in the supreme court case of Burwell vs. Hobby Lobby. This case rocked the supreme court and our nation as many were very opinionated one way or the other. The complete dynamics of healthcare and religion in business was changed and defined by this case. When Obama passed the American Affordable Care Act businesses had to help pay for their employees’ healthcare, part of this healthcare included contraceptives. Hobby Lobby did not agree with four out of the twenty contraceptives
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BURWELL v. HOBBY LOBBY STORES, INC., 134 S. Ct. 2751, 2782 (2014). UNITED STATES SUPREME COURT Facts: Hobby Lobby, Inc. is owned and operated by the Green family, who run their business based on principles of the Christian Faith. One of the many values of the Christian Faith is that the use of contraceptives is immoral and should not be legal. However, the Patient Protection and Affordable Care Act established that a list of predetermined conditions will be made more affordable and the quality of
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1. John Smith tax issues: a. How is the $300,000 treated for purposes of Federal tax income? The $300,000 is taxable income; the reason is that the IRS always collects taxes when we receive a lump sum payment as compensation for negligence, injury or other wrongdoing. Litigants are allowed to bring up a taxation lawsuit in the case of lump sum payments. Mr. Smith, you will have to take all of the necessary steps to make sure that the amount is paid to the government on time so that no fines
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is the case of Burwell vs. Hobby Lobby. The Affordable Care Act requires that employer health plans include coverage for preventive services and the federal government has issued regulations defining contraceptive care as one of the services that must be covered. The plaintiffs in these consolidated cases are two for-profit business corporations that sought, and were awarded, an exemption from that general rule under the Religious Freedom Restoration Act ("Burwell v. Hobby Lobby Stores & Conestoga
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year and the $25,000 received will be counted as income on this tax year. If in fact you did not deduct the expense in the past, then the $25,000 will not be taxable since it is a reimbursement. Three: Buy vs. Rent office space. Interest on a loan and depreciation are deductible as a business expense but so is your rent. Based on $300,000 income and not electing to be taxed as a corporation, you will be at the 33% tax bracket (Married
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