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July 2015


IR-2015-91, June 19, 2015

WASHINGTON — The Internal Revenue Service today released proposed regulations implementing a new federal law authorizing states to offer specially-designed tax-favored ABLE accounts to people with disabilities who became disabled before age 26.

The Achieving a Better Life Experience (ABLE) account provision was signed into law in December 2014. Recognizing the special financial burdens faced by families raising children with disabilities, ABLE accounts are designed to enable people with disabilities and their families to save for and pay for disability-related expenses.

The new law authorizes any state to offer its residents the option of setting up an ABLE account. Alternatively, a state may contract with another state that offers such accounts. The account owner and designated beneficiary of the account is the disabled individual. In general, a designated beneficiary can have only one ABLE account at a time, and must have been disabled before his or her 26th birthday. The law provides what it means to be disabled for this purpose.

Contributions in a total amount up to the annual gift tax exclusion amount, currently $14,000, can be made to an ABLE account on an annual basis, and distributions are tax-free if used to pay qualified disability expenses.

[Contributions are limited, however. The proposed regulations provide a safe harbor that permits a qualified ABLE program to satisfy this requirement regarding total cumulative contributions if the program prohibits any additional contributions to an account as soon as the account balance reaches the specified contribution limit under such State’s program established under section 529. Once the account balance falls below the prescribed limit, contributions may resume, subject to the same limitation.]  

These are expenses that relate to the designated beneficiary’s blindness or disability and help that person maintain or improve health, independence and quality of life. For example, they can include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology and personal support services and other expenses.

In general, an ABLE account is not to be counted in determining the designated beneficiary’s eligibility for many federal means-tested programs, or in determining the amount of any benefit or assistance provided under those programs, although special rules and limits apply for Supplemental Security Income (SSI) purposes.

The proposed regulations, available today for public inspection at, provide guidance to state programs, designated beneficiaries and other interested parties on a number of issues. For example, the proposed regulations explain the flexibility the programs have in ensuring an individual’s eligibility for an ABLE account. They also indicate that the IRS will develop two new forms that ABLE account programs will use to report relevant account information annually to designated beneficiaries and the IRS — Form 1099-QA for distributions and Form 5498-QA for contributions.

Until the issuance of final regulations, taxpayers and qualified ABLE programs may rely on these proposed regulations.

The IRS welcomes comments. Comments must be received by Sept. 21, 2015, and may be submitted electronically, by mail, or hand delivered to the IRS. A public hearing is scheduled for Oct. 14, 2015, at the IRS Auditorium, 1111 Constitution Ave. NW, in Washington. See the proposed regulations for details on submitting comments or participating in the public hearing. More information can be found at Tax Benefit for Disability: IRC Section 529A.

[These rules fall under Section 529 of the IRS Code, which is the same section as the 529 Education Savings Accounts.  For that reason, ABLE Accounts appear to be similar in many respects to the education savings accounts allowing for post-tax contributions and tax-free withdrawals.]



by Richard S. Schwartz, CPA CVA

A few months back, I had recommended that one of my clients who owns a dental practice contact David Miller from Carr Healthcare Realty with regard to a lease for a new location for his office.  Dave's team at Carr was able to negotiate a total savings of approximately $65K for my client over the ten-year term of the lease. 

These savings include four-months free rent during the build-out period, six-months free rent upon opening the practice, and a reduction in the first-year rent by about $1k per month.  Dave's team also negotiated for exclusivity as the only dental practice within the retail center even though that provision was not proposed by the landlord in the original letter of intent.

What makes working with firms like Carr Healthcare Realty even better is that this service is 100% FREE for the tenant. Instead of charging our clients a fee for services provided, Carr Healthcare Realty gets paid a commission from the landlord as the Tenant's Broker.  So I was able to point this client in the right direction to help him save $65k in lease payments over the next ten years at exactly ZERO cost to him.  What a great value Carr Healthcare Realty is able to provide.

Now that I'm more familiar with this service available to tenants, I think it would be a good idea for every practice owner who doesn't own their commercial space to obtain a copy of their lease agreement while there are still two years or so remaining on the lease term.  Simply forward that lease to a specialist like Dave Miller and the Carr team for review, and let them spot potential cost saving opportunities to be negotiated as part of the lease renewal.  They are also the ones who will negotiate directly with the landlord at no fee to our clients.

Dave Miller is an Agent of Carr Healthcare Realty and specializes in representing Healthcare Professionals with all their real estate needs. Carr Healthcare Realty has successfully negotiated over 600 lease and sale transactions. You can reach Dave at (617)595-6497 or Dave wrote an article for our June 2015 Newsletter.



by Schwartz & Schwartz PC Payroll Team

We want to make sure that you're aware that Massachusetts is implementing a new Earned Sick Time Policy that all MA-based employers must comply with effective July 1, 2015.

In short, employers are mandated to provide 1 hour of Sick Time for every 30 hours worked; with a cap of 40 hours of Sick Time per year. This includes full-time, part-time, temporary and seasonal employees.  The Sick Time is unpaid or paid depending on the size of the company as follows: 

An employer must provide earned paid sick time to all eligible employees if the employer maintained an average of 11 or more employees on the payroll during the preceding benefit year. Employers shall determine the average number of employees by counting the number of employees, including full time, part-time, seasonal, and temporary employees, on the payroll during each pay period and dividing by the number of pay periods. Employees furnished to an employer by a temporary staffing agency and paid by the staffing agency count as employees of both the staffing agency and the employer for the purpose of determining employer size.

Employers must post the Earned Sick Time notice in a conspicuous location accessible to employees and provide the employees with a copy. For your convenience, we've posted a copy of the notice online which you can download, print, and use. (Click here for the Notice)

You can view the regulation in its entirety here:




Income Taxes

Saving and Investing



  • If you changed jobs, give one of our CPAs a call to discuss filling out new W-4 Forms
  • Now's the time to work through your 2015 income tax projection, especially with all the new tax increases that took effect in 2013.
  • Update your monthly cash flow budget
  • If your Keogh or Solo 401(k) accounts are worth more than $250,000, or if you have employees in your plan, Form 5500-EZ due by 7/31/15
  • Review, update or create your healthcare proxy.  Need Help?.


2014 & 2015 TAX FACTS

  • For 2014, the standard deduction for a single individual is $6,200 and for a married couple is $12,400. A person will benefit by itemizing once allowable deductions exceed the applicable standard deduction. Itemized deductions include state and local income taxes (or sales taxes), real estate taxes, mortgage interest, charitable contributions, and unreimbursed employee business expenses.
  • For 2014, the personal exemption is $3,950. Individuals will claim a personal deduction for themselves, their spouse, and their dependents. 
  • The maximum earnings subject to social security taxes is $118,500 for 2015, up from $117,000 in 2014.
  • The standard mileage rate is $.575 per business mile as of January 1, 2015, up from $.56 for 2014.
  • The maximum annual salary deferral into a 401(k) plan or a 403(b) plan is $18,000 in 2015, up from $17.5k in 2014.  And if you'll be 50 or older by December 31st, you can contribute an extra $6,000 into your 401(k) or 403(b) account this year, up from $5,500 last year.
  • The maximum annual contribution to your IRA is $5,500 for 2014 and 2015.  And if you turn 50 by December 31st, you can contribute an extra $1,000 that year.  You have until April 15, 2015 to make your 2014 IRA contributions.


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This Month's Topics

IRS Issues Guidelines for New State-Sponsored ABLE Accounts for People with Disabilities

Carr Healthcare Realty Saves Boston Area Dentist $65k On A New Lease - For Free!

Massachusetts Earned Sick Time Law Kicks In On July 1st

The FICA Refund for Medical Residents 

2014 & 2015 Tax Facts

Tax and Financial Planning Calendar for July 2015


Browse our index of previous months' newsletter topics

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In a shocking development, the IRS recently announced that they will be honoring the FICA tax refunds submitted by residency programs and individual doctors.  The catch is that only FICA taxes paid prior to 4/1/05 qualify.

For more information, go to our April 2010 Newsletter, our January 2009 Newsletter, or our February 2001 Newsletter or read through the IRS' Chief Counsel Advice Memorandum on this issue.

Let's work together to keep current on this hugely valuable tax break.  Please post whatever you read or hear regarding this FICA issue on our new Message Board we set up just for this topic.


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