AccountingToday provided a compelling look at the upcoming tax changes for 2015 and beyond, so we wanted to give you the highlights.

The “Plan for 2015 Year End and Beyond” webinar, sponsored by Wolters Kluwer, featured Mark Luscombe, JD, LL.M, CPA and columnist for the publication. There are a lot of changes coming from statutes, regulations, and court cases, so what exactly do you need to know for best practices in bookkeeping and retirement planning? And how can a smart document management system help?


New Requirements for 2015 Tax Returns

There are new dates in place for partnerships and corporate tax returns because Congress enacted trade and highway legislation that needed new revenue sources. The main change is that the partnership filing due date is shifting from April 15 to March 15—this change will impact returns due in 2017 and beyond.

Corporate return due dates are shifting from March 15 to April 15. June 30, fiscal year corporations will be eligible for a 7-month extension through 2025. Partnership return change dates have been pushed to make it easier on individuals. This gives them approximately 1 month to have K-1s and to ensure their personal filings match other bookkeeping.

The FBAR deadline is also moving up to April 15 to keep it more in line with personal filing deadlines. This means that both foreign bookkeeping filings will have the same date, and the FBAR gets a new 6-month extension. The main goal is for all foreign filings to be unified to remove duplicate filings.


Addressing the Tax Gap             

According to Luscombe, some of the larger changes in 2015 are focused on addressing the tax gap that the IRS is seeing. Some of the bigger changes include:

  • There is now a 6-year statute of limitations if there is an understated income on a return for every tax return filed after July 31, 2015.
  • Education tax breaks are being targeted by making education foundations file a supporting 1098-T. People can’t claim education-related deductions without this bookkeeping form, starting for returns that cover calendar year 2016.
  • Starting at the end of 2016, lenders will be required to report on Form 1098 to help reduce excess mortgage interest that is being claimed. Reporting will include mortgage origination dates, property information, and the outstanding principal amount at the beginning of the fiscal year.
  • Estates have a more consistent reporting package that set a basis of inherited property, making executors provide this basis information. Inheritors will need to use this basis starting after Feb. 29, 2016, due to a recent IRS extension.

It’s important to use your DMS to properly address these changes in your existing tax documentation. The good news is that 1 change can often help you determine where to look for other changes. By digitizing your documents and running a robust platform, you’ll be able to ensure that everything gets updated and that your DMS keeps you properly compliant.


Other Notable Changes

Some of the new elements enacted in 2015 are an extension of an employer’s ability to transfer excess pension benefits to retiree medical accounts. There has been equalization across excise taxes for liquefied natural and petroleum gas as well as compressed natural gas.

Employers are also not considered an applicable large employer under the Affordable Care Act, specifically for veterans who receive healthcare services from Tricare or the Veterans Administration. The webinar also discusses changes that will impact 2016 and other future filings on issues such as foreign asset reporting, planned and expected changes to the Affordable Care Act, employer benefits for the FMLA, bereavement, and absence policies.

There was brief talk of the retroactive changes and tax benefits that may result from the allowance of same-sex marriage. These changes are expected as the IRS and Congress look to properly grant equality that the Supreme Court laid out.

There are a lot of retroactivity concerns that could cause significant changes to documents, especially around estate planning. The IRS does not recognize civil unions and domestic partnerships at this time, but these existing relationships may be provided equal protection under new legislation and mandates. Using a document management platform like eFileCabinet On-Premise or eFileCabinet Online will help you quickly search for terms such as “husband,” “wife,” and “dependents” that can now have broader meanings or require changes to meet new legal statuses for your clients.


Big Changes for Retirement Planning

The US is experiencing an ever-growing number of retirees. The IRS has responded early to some of the major concerns by making some large changes to retirement planning. Most of the changes aren’t statutory, but instead are the result of regulatory action or court decisions. There are some positive and potentially negative changes for retirement planning, so it’s important to have a strong understanding of the major shifts.

The IRS now permits taxable and non-taxable portions of distributions for 401(k), 403(b), or 457(b) plan to separate distributions into separate accounts. This essentially allows people to roll taxable portions of the distribution into a successor or employer 401(k), so all that remains in an IRA is a non-taxable portion. This allows for a conversion to a Roth IRA.

This change went into effect on January 1, 2015, and reviews should already be part of your bookkeeping best practices. Some of the other important retirement planning changes include:

  • IRA rollovers are now restricted to one 60-day rollover per year for all IRA accounts, not for each account.
  • Inherited IRAs are not considered retirement assets and are not subject to creditor protection, according to a Supreme Court decision.
  • Longevity annuities no longer have an adverse effect on required minimum distributions when people outlive their retirement age. This is currently effective.
  • Deferred annuities are now able to be offered through target date funds, or TDFs.
  • MyRAs have completed a successful trial run and will see a complete rollout for the general public in 2016.


Bookkeeping: All This and More

The “Plan for 2015 Year End and Beyond” webinar from Accounting Today touched on a large number of changes for tax preparation in the next few years.

Every financial service and accounting firm will need a robust system to help it check filings against the latest changes and regulatory shifts. eFileCabinet offers cloud-based and on-site programs that can help you manage many of these tax, retirement, and other financial shifts through a smart system of checks.