1. Carefully set up your payroll system and update it regularly Take the time to input correct employee information, tax withholding amounts and payment information. By doing this, you'll avoid paying the wrong amount to employees and stay away from errors in the long run. 2. Pay your employees on time If you want to …
Month: February 2020
IRS offers guidance for farmers on small-business tax break
The Internal Revenue Service and the Treasury Department released guidance Friday to help farmers deal with a provision of the Tax Cuts and Jobs Act and reduce their taxes by leveraging a tax break for small businesses. The 2017 tax law included a provision that exempts small business taxpayers from the capitalization rules under Section …
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Start or review an accountable plan
Employee reimbursements need careful compliance. Employees, including business owner/employees, often are required to pay expenses out of pocket on behalf of their employer or business. In most cases, they do so either expecting to be reimbursed or, until the end of 2017, expecting to claim the expenditures as a miscellaneous itemized deduction (above a threshold …
New Withholding Process Made Official
The Treasury Department and the Internal Revenue Service have issued their proposed regulations updating the federal income tax withholding rules, bringing them in line with the changes made by the Tax Cuts and Jobs Act. The regulations have been published in the Federal Register. In general, the regulations are designed to usher the revamped Form W-4, Employee’s Withholding Certificate, …
Do I Have a Business or a Hobby?
Do I Have a Business or a Hobby? Taxpayers must report on their tax return the income earned from hobbies. The rules for how to report the income and expenses depend on whether the activity is a hobby or a business. There are special rules and limits for deductions taxpayers can claim for hobbies. In …
Final rules determine maximum vehicle values
The IRS finalized the rules for maximum vehicle values under the cents-per-mile valuation rule and the fleet-average valuation rule after the law known as the Tax Cuts and Jobs Act increased those values to $50,000, adjusted for inflation. Consistent with the substantial increase in the dollar limitations on depreciation deductions under Sec. 280F(a), the regulations …
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Gig Economy Income Can Affect a Taxpayer’s Bottom Line
From Uber to AirBnB, Lyft to TaskRabbit, more Americans are getting involved in the gig economy. Whether their involvement is just a side hustle or the main event, taxpayers can find income earned in this way can affect their tax returns—and it’s not always in a positive way. The Internal Revenue Service says a little …
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Thousands of New Non-Profits Not Following Federal Law
An audit by the Treasury Inspector General for Tax Administration (TIGTA) has found that nearly 10,000 new tax-exempt organizations failed to follow federal law to notify the IRS of their formation. Penalties, the auditors conclude, may be reserved for all but the most egregious laggards. Why Was the Audit Done? On Dec. 18, 2015, the …
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