Weekly Tax Brief

Be sure your employee travel expense reimbursements will pass muster with the IRS

Details: Published: 05 October 2018 05 October 2018

Does your business reimburse employees’ work-related travel expenses? If you do, you know that it can help attract and retain employees. If you don’t, you may want to start. Changes under the TCJA make such reimbursements even more attractive to employees: Employees are no longer allowed to deduct such expenses. Travel reimbursements also come with tax benefits, but only if you follow a method that passes muster with the IRS. To learn more, contact us. We can help you determine whether you should reimburse such expenses and which method is right for you.

2018 Q4 tax calendar: Key deadlines for businesses and other employers

Details: Published: 01 October 2018 01 October 2018

Here are a few key tax-related deadlines for businesses and other employers during Quarter 4 of 2018. Keep in mind that this isn't all-inclusive, so there may be additional deadlines that apply to you. Contact us for more about the filing requirements and to ensure you're meeting all applicable deadlines.

October 15

If a calendar-year C corporation that filed an automatic six-month extension:
- File a 2017 income tax return (Form 1120) and pay any tax, interest and penalties due.
- Make contributions for 2017 to certain employer-sponsored retirement plans.

October 31

Report income tax withholding and FICA taxes for third quarter 2018 (Form 941) and pay any tax due. (See exception below under “November 13.”)

November 13

Report income tax withholding and FICA taxes for third quarter 2018 (Form 941), if you deposited on time and in full all of the associated taxes due.

December 17

If a calendar-year C corporation, pay the fourth installment of 2018 estimated income taxes.

You might save tax if your vacation home qualifies as a rental property

Details: Published: 28 September 2018 28 September 2018

If you own a vacation home and both rent it out and use it personally, classification as a rental property might save tax. Expenses attributable to a rental property aren’t subject to the TCJA’s tightened limits on itemized deductions for property tax and mortgage interest, and losses may be deductible. A rental property generally is one you use for 14 days or less, or under 10% of the days you rent it out, whichever is greater. Adjusting use between now and year end can ensure it’s classified as a rental property. Contact us for details.

How to reduce the tax risk of using independent contractors

Details: Published: 25 September 2018 25 September 2018

Classifying a worker as an independent contractor frees a business from payroll tax liability and responsibility for withholding income taxes and the worker’s share of payroll taxes. But if the IRS reclassifies a worker as an employee, your business could be hit with back taxes, interest and penalties. Contact us to learn more.

Back-to-school time means a tax break for teachers

Details: Published: 21 September 2018 21 September 2018

When elementary and secondary school teachers are setting up their classrooms for the new school year, it’s common for them to pay for some classroom supplies out of pocket. A special tax break allows these educators to take an above-the-line deduction for up to $250 of these expenses. The deduction is especially important now due to the TCJA’s suspension of miscellaneous itemized deductions subject to the 2% of adjusted gross income floor, which before 2018 could be used for educator expenses. Contact us for details on the educator expense deduction.

Keep it SIMPLE: A tax-advantaged retirement plan solution for small businesses

Details: Published: 17 September 2018 17 September 2018

If your small business doesn’t have a retirement plan and has 100 or fewer employees, consider a SIMPLE IRA. Offering a retirement plan can provide your business with valuable tax deductions for its contributions and help attract and retain employees. As the name implies, a SIMPLE IRA is easy to set up and maintain. Eligible employees can defer up to $12,500 in 2018 (plus a catch-up of up to $3,000 for those age 50 or older). The deadline for setting one up for this year is Oct. 1, 2018. Contact us to learn more about SIMPLE IRAs and other retirement plan options.

Play your tax cards right with gambling wins and losses

Details: Published: 14 September 2018 14 September 2018

If you gamble, play your tax cards right with your wins and losses. Changes under the TCJA could have an impact. You must report 100% of your winnings as taxable income, but you might pay a lower rate on them because of TCJA rate reductions. Gambling losses are still allowed as an itemized deduction (up to your winnings for the year), but, with the standard deduction nearly doubled under the TCJA, you might no longer benefit from itemizing. Finally, “professional” gamblers face tighter limits on deducting their gambling expenses. Contact us if you have questions.

Keep it SIMPLE: A tax-advantaged retirement plan solution for small businesses

Details: Published: 11 September 2018 11 September 2018

Keep an eye out for extenders legislation

Details: Published: 06 September 2018 06 September 2018

The pieces of tax legislation garnering the most attention these days are the Tax Cuts and Jobs Act signed into law last December and the possible “Tax Reform 2.0” that Congress might pass this fall. But what happens with “extenders” legislation is also important. It affects whether the above-the-line deduction for tuition and related expenses, the mortgage insurance premium deduction and the exclusion from gross income for mortgage loan forgiveness will be available for 2018. Contact us with questions about these breaks and whether you can benefit.

Choosing the right accounting method for tax purposes

Details: Published: 04 September 2018 04 September 2018

The Tax Cuts and Jobs Act (TCJA) liberalized the eligibility rules for using the cash method of accounting, making this method (which is simpler than the accrual method) available to more businesses. Now the IRS has provided procedures for obtaining automatic consent to change accounting method under the TCJA. If you’re eligible for both methods, consider whether switching would be beneficial.

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