Benefits – Bregante+Company LLP

The Dangers of Treating Partners as Employees

In recent years many companies have found it very difficult to retain key employees. In order to mitigate this issue, many companies that are organized as partnerships are offering their essential employees an equity interest in the partnership, commonly called “profits only interests”. There are many risks, however, that companies organized as partnerships need to take into consideration before offering equity to their employees. They may be unaware that even a small equity interest can cause unwanted tax consequences such as over/underpaid FICA taxes, and can also change the treatment of compensation and company paid benefits. These are just a few of the risks that need to be assessed. If you’d like to know more please click here.

IRS to Implement Special Transit Benefit Procedure

On January 8, 2015 the IRS issued Notice 2015-2 “Application of Retroactive increase in Excludable Transit Benefits” which allows employers to implement a retroactive increase in excludable qualified transit benefits. The adjustment can be made on the 4^th quarter Form 941 (Employer’s Quarterly Federal Tax Return) to reduce wages subject to withholding for all 4 quarters of 2014.

Form 941 filing is due January 31, 2015.

The monthly exclusion for qualified commuter benefits increased from $130 to $250 per month per employee until January 15, 2015 at which time commuter benefits will effectively drop back to $130.