Weekly Tax Brief

Your home office expenses may be tax deductible

Details: Published: 06 January 2020 06 January 2020

Technology has made it easier to work from home. However, just because you have a home office doesn’t mean you can deduct expenses associated with it on your tax return. In order to be deductible, you must be self-employed and the space must be used regularly and exclusively for business purposes. If you qualify, there are two options for a deduction. You can deduct a portion of your mortgage interest, property taxes, insurance, utilities and certain other expenses, as well as the depreciation allocable to the office space. This requires calculating and substantiating actual expenses. Alternatively, you can take a “safe harbor” deduction. Other rules and limits apply. Contact us for details.

New law provides a variety of tax breaks to businesses and employers

Details: Published: 03 January 2020 03 January 2020

While you were celebrating the holidays, you may have missed a law that passed with a grab bag of provisions providing tax relief to businesses and employers. It makes many changes to the tax code, including an extension (generally through 2020) of provisions that were set to expire or already expired. For example, the law extended the employer tax credit for paid family and medical leave through 2020, as well as the Work Opportunity Tax Credit for hiring individuals who are members of targeted groups. It also repealed the “Cadillac tax” on high-cost employer-sponsored health coverage. These are only a few provisions of the new law. If you have questions, don’t hesitate to contact us.

Congress gives a holiday gift in the form of favorable tax provisions

Details: Published: 31 December 2019 31 December 2019

As part of a year-end budget bill, Congress just passed a package of tax provisions that will provide savings for some taxpayers. It contains a variety of tax breaks. For example, the age limit for IRA contributions is being raised from age 70½ to 72. The age to take required minimum distributions (RMDs) is also going up from 70½ to 72. Most of the tax “extenders” have been reinstated through 2020. In addition, there is a package of retirement-related provisions, including new rules that allow some part-time employees to participate in 401(k) plans. These are only some of the provisions in the new law. Contact us with any questions.

Wayfair revisited — It’s time to review your sales tax obligations

Details: Published: 23 December 2019 23 December 2019

In a 2018 decision, the U.S. Supreme Court expanded the power of states to collect sales tax from remote sellers. Today, nearly every state with a sales tax has enacted a similar law. So if your company does business across state lines, it’s a good idea to reexamine your sales tax obligations. If you make online, telephone or mail-order sales in states where you lack a physical presence, it’s critical to find out whether those states have economic nexus laws and determine whether your activities are enough to trigger them. If you have nexus with a state, you must register and collect state and applicable local taxes on your taxable sales there. If you need assistance, contact us.

Small Businesses: It may not be not too late to cut your 2019 taxes

Details: Published: 20 December 2019 20 December 2019

Don’t let the holiday rush keep you from taking some important steps to reduce your 2019 tax liability. You still have time to execute a few strategies. For example, are you thinking about purchasing new or used heavy vehicles, heavy equipment, machinery or office equipment in the new year? Buy them and place them in service by December 31, and you can deduct 100% of the cost as bonus depreciation. Or you can put recurring expenses normally paid early in the year on your credit card before Jan. 1. That way, you can claim the deduction for 2019 even though you don’t pay the bill until 2020. Finally, before year-end, contribute to a SEP or 401(k) if you haven’t reached the contribution limit.

Do you have a side gig? Make sure you understand your tax obligations

Details: Published: 16 December 2019 16 December 2019

The number of people engaged in the “gig” or sharing economy has grown in recent years. And there are tax consequences for the people who perform these jobs, such as providing car rides, renting spare rooms, delivering food and walking dogs. Generally, if you receive income from these gigs, it’s taxable. That’s true even if the income comes from a side job and if you don’t receive a 1099-MISC or 1099-K form reporting the money you made. You may need to make quarterly estimated tax payments because your income isn’t subject to withholding. Some or all of your business expenses may be deductible on your tax return, subject to the normal tax limitations and rules. Contact us to learn more.

2020 Q1 tax calendar: Key deadlines for businesses and other employers

Details: Published: 13 December 2019 13 December 2019

Here are a few key tax-related deadlines for businesses during Q1 of 2020. JAN. 31: File 2019 Forms W-2 with the Social Security Administration and provide copies to employees. Also provide copies of 2019 Forms 1099-MISC to recipients and, if reporting nonemployee compensation in Box 7, file, too. FEB. 28: File 2019 Forms 1099-MISC if not required earlier and paper filing. MAR. 16: If a calendar-year partnership or S corp., file or extend your 2019 tax return. Contact us to learn more about filing requirements and ensure you’re meeting all applicable deadlines.

3 last-minute tips that may help trim your tax bill

Details: Published: 10 December 2019 10 December 2019

You may still have time to reduce your federal tax liability by taking certain steps. For example, contribute the maximum to your retirement plans by year end, including traditional IRAs and SEP plans. Another idea: If you make your Jan. 2020 payment this month, you can deduct the interest portion on your 2019 tax return (assuming you itemize deductions on your tax return). You can also “harvest” any investment losses by Dec. 31. If you have more losses than gains, you generally can apply up to $3,000 of the excess to reduce your ordinary income. Any remaining losses are carried forward to future tax years. Contact us if you want to discuss ways to minimize your 2019 tax liability.

Holiday parties and gifts can help show your appreciation and provide tax breaks

Details: Published: 06 December 2019 06 December 2019

The holiday season is in full swing. Your business may want to show its gratitude to employees and customers by giving them gifts or hosting parties. It’s a good idea to understand the tax rules involved. Are they tax deductible by your business and taxable to the recipients? Gifts to customers are generally deductible up to $25 per recipient per year. De minimis, noncash gifts to employees (such as a holiday turkey) aren’t included in their taxable income yet are deductible by you. Holiday parties are 100% deductible if they’re primarily for the benefit of non-highly-paid employees and their families. If customers attend, parties may be partially deductible. Contact us with questions.

What is your taxpayer filing status?

Details: Published: 02 December 2019 02 December 2019

When you file your tax return, you do so with one of five filing statuses. It’s possible that more than one status will apply. The box checked on your return generally depends in part on whether you’re unmarried or married on December 31. Here are the filing statuses: Single, married filing jointly, married filing separately, head of household and qualifying widow(er) with a dependent child. Head of household status can be more favorable than filing as a single person, but special rules apply. You must generally be unmarried, have a qualifying child (or dependent relative) and meet certain rules involving “maintaining a household.” If you have questions about your filing status, contact us.

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