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 …
Author: Velisa Bookkeeping Services LLC
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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W2 & 1099 Deadline and Penalties
W-2 Deadlines for 2019 The following table will help you to remember all the W-2 deadlines for sending W-2 forms to the employees and for paper filing or e-filing them with the SSA. Form W-2DeadlineIssuing W-2 Forms to the employeesJanuary 31, 2020Filing to SSA by MailJanuary 31, 2020Filing to SSA ElectronicallyJanuary 31, 2020 W-2 Penalties …
3 Reasons to Get a Health Savings Account
An HSA can help you stretch your health care dollars and build your retirement savings at the same time, as long as you’re eligible for one and you spend the money in your HSA on eligible expenses. Here’s a look at the benefits of HSAs and tips for opening one: 1. HSAs are tax-free Putting …
More taxpayers qualify for student loan COD relief
The IRS extended its safe-harbor relief from recognizing cancellation-of-debt (COD) income for students whose loans were discharged either because their schools were closed or as a result of some type of fraud (Rev. Proc. 2020-11). The IRS had earlier provided relief for students from Corinthian College or American Career Institutes Inc. whose loans were discharged …
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IRS: Recent legislation requires tax exempt organizations to e-file forms
Tax-exempt organizations must now electronically file Forms 990, 990-PF, 8872 and 1065. The new law affects tax exempt organizations in tax years beginning after July 1, 2019. The following IRS forms are included in the mandate: Form 990, Return of Organization Exempt from Income Tax.Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated …
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