Taxes – Page 3 – Business of Your Business

Tag: Taxes (page 3 of 4)

Tax Season is Almost Here!

The IRS will start accepting personal income tax returns on Monday, January 27^th.

The deadline to file your 2019 tax return and pay any tax owed is Wednesday, April 15^th.

The IRS continues to encourage taxpayers to file their returns electronically and choose direct deposit for faster receipt of refunds.

New W4 Form for 2020

December 15, 2019 / Wiley Harrison / Comments Off

The beginning of a new year is a great time for employees to review their withholding and determine if any adjustments are necessary.

The IRS has released the 2020 Form W4 which has been redesigned to reduce complexity and increase the accurateness of the withholding system.

The 2020 W4 form should be used by new hires and any employees making withholding changes in 2020.

Click here to view the 2020 Form W4

Click here for more information regarding the 2020 Form W4

How Much Can You Save for Retirement in 2020?

November 13, 2019 / Wiley Harrison / Comments Off

The IRS has announced the contribution limit for employees who participate in a 401K, 403B and most 457 plans will increase to $19,500 for the tax year 2020 (up from $19,000 in 2019).

The catch-up contribution limit for employees aged 50 and over who participate in these plans will increase to $6,500 (up from $6,000 in 2019).

Recent Name Change?

March 5, 2019 / Wiley Harrison / Comments Off

Taxpayers change their names for several reasons (i.e. new marriage, recent adoption, divorce).

Regardless of the reason, taxpayers should notify the Social Security Administration (SSA) of any name changes as soon as possible. The IRS checks the SSA records to ensure that the names and social security numbers on the forms match.

Failing to notify the SSA of a name change can delay the processing of a taxpayer’s federal tax returns as well as any tax refunds.

Protect Your Personal Information

February 25, 2019 / Wiley Harrison / Comments Off

The IRS suggests the following to safeguard your personal information:

• Do not routinely carry a Social Security card or other documents showing a Social Security number.

• Do not overshare personal information on social media. This includes information about past addresses, a new car, a new home and children.

• Keep old tax returns and tax records under lock and key.

• Safeguard electronic files by encrypting and properly disposing them.

• Shred tax documents before trashing.

Where’s My Refund?!

February 7, 2019 / Wiley Harrison / Comments Off

This online tool by the IRS allows taxpayers to check the status of their refund anytime.

Taxpayers can start checking on the status of their return within 24 hours after the IRS received their e-filed return, or four weeks after they mail a paper return.

IRS’ Where’s My Refund

The IRS Releases the 2019 Standard Mileage Rates

December 17, 2018 / Wiley Harrison / Comments Off

Beginning on Jan. 1, 2019, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

58 cents per mile driven for business use, up 3.5 cents from the rate for 2018,
20 cents per mile driven for medical or moving purposes, up 2 cents from the rate for 2018, and
14 cents per mile driven in service of charitable organizations.

It is important to note that under the Tax Cuts and Jobs Act, taxpayers cannot claim a miscellaneous itemized deduction for unreimbursed employee travel expenses. Taxpayers also cannot claim a deduction for moving expenses, except members of the Armed Forces on active duty moving under orders to a permanent change of station.

For more details see Notice-2019-02.

Social Security Tax Increase for 2019

December 7, 2018 / Wiley Harrison / Comments Off

As of January 1, 2019, the maximum wage base that is subject to the Social Security payroll tax will increase from $128,400 to $132,900.

There is no limit on earnings subjected to the Medicare payroll tax.

Are You Eligible to Claim an Education Credit?

February 1, 2018 / Wiley Harrison / Comments Off

For tax year 2017, student must receive Tuition Statement, form 1098-T, from an eligible institution to claim the tuition and fees deduction, American opportunity credit, or the lifetime learning credit,

There are certain reasons why institutions will not send you form 1098-T. For example having tuition waived or paid in full with scholarships, being a non-resident student, or having a formal separate financial and billing arrangement with an employer or government agency.

Keep records to prove enrollment, related expenses and tuition payments. This can be used to send to the IRS directly to claim the credit.

For more information and a test of questions to determine eligibility Click Here!

New Tax Reform, Tax Cuts & Jobs Act

January 1, 2018 / Wiley Harrison / Comments Off

President Trump recently signed the tax reform bill into law which resulted into major changes to the code for both individuals and corporations. Here is a brief summary of the changes that will affect most of you.

Tax Brackets – Same number of brackets, different tax rates and different ranges. If your taxable income is the same in 2018 as was 2017, you will pay less federal taxes. A lot of the difference are in the changes leading to “taxable income”.

The marriage penalty is almost gone. – Under the old law the combined income for a married couple was taxed at a higher rate than the same total income for 2 individuals. For example: a single person with taxable income of $90K would be in the 25% bracket. A couple with $180k in taxable income is in the 28% bracket. Under the new law, both cases are in the 25% bracket.

New Standard Deductions

Filing Status	Old Law	New Law
Single	$6,500	12,000
MFJ	13,000	24,000
MFS	6,500	12,000
HOH	9,350	18,000

Capital Gains (stock sales and sales of other appreciated assets)

- Short term gains are taxed as ordinary income (no difference)
- Long term rates are as follows:

	Single	MFJ	HOH	MFS
0% up to:	$38,600	$77,200	$51,700	$38,600
15% up to:	425,000	479,000	452,400	239,500
20% over	425,000	479,000	452,400	239,500

Tax Breaks for Parents. The child tax credit is increased from $1,000 per child to $2,000 per child. Of that amount $1,400 is refundable. In addition, the phase out for eligibility is expanded.

Tax Status	Old Law	New Law
MFJ	$110,000	$400,000
Individuals	$75,000	$200,000

- If children are 17 years and older or you care for elderly relatives, you can claim a nonrefundable credit of $500 each.

Home mortgage interest can only be taken for mortgage balances up to $750,000. This was previously $1 million. This applies to loans taken after Dec. 15, 2017. Interest on home equity debt can no longer be deducted.

State and Local Tax Deduction (SALT) is now limited to $10,000.

Deductions that are disappearing:

- Casualty and theft losses
- Unreimbursed employee expenses
- Moving expenses

Pass-through income from sole proprietorship, LLCs, partnerships, and S corporations will be able to deduct 20% of the profit. There are phaseout income limits that apply to “professional services” business owners. They are $157,500 and $315,000 for individuals and married couples respectively.

Corporate tax rates have been reduced for most corporations, but not for all. A corporation with profit below $50,000 will pay more in taxes. The new rate is 21% for all profits. The old rates were:

From	To	Rate
$0	$50,000	15%
50,000	75,000	25%
75,000	100,000	34%
100,000	335,000	39%

Interesting: If in 2017 your corporate profit was $50,000; your federal tax was $7,500 (50K * 15%). That tax increases under the new law to $10,500 (50K * 21%). Let’s hope this is corrected soon.