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Tax Rules You Should Know About for 2011

TAX Author Barbara Weltman points out some new rules that will take effect in 2011 that may impact your actions for this year, in this article from the OPEN Forum:

  • Changes in medical reimbursement plans: If your company maintains a flexible spending account (FSA), health reimbursement account (HRA), or health savings account (HSA), new rules take effect in 2011.
  • Reporting of credit card transactions: For tax years beginning after 2010, payment processors and third-party settlement organizations are required to report to the IRS all credit card and similar transactions of payments to merchants. 
  • Grants for wellness programs: The federal government will make tax-free grants to small businesses that set up Comprehensive Workplace Wellness Programs.
  • W-2 reporting: Employers are required to report on employee W-2 forms the value of health insurance, starting with W-2 forms for 2011.
  • Cafeteria plans: Cafeteria plans are employee benefit plans that let participants choose from a menu of benefits or cash. Plans cannot discriminate in favor of "highly compensated employees" (e.g., owners or management); complex testing rules are used to determine whether plans are discriminatory. Starting next year, small businesses can set up Simple Cafeteria Plans under which plans are automatically treated as nondiscriminatory (no testing is necessary).

Click here to read the full article, with recommendations on actions you can do now in preparation for the changes.

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Tribute, Inc. is a provider of ERP business management software for distributors and system integrators in the fluid power, hose, motion control, automation, fluid handling & pump industry who provide value-added services.