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 It also repealed the “Cadillac tax” on high-cost employer-sponsored health coverage.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.
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.
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.
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.
If you save for retirement with an IRA or other plan, be aware there’s a new law that makes several changes to these accounts. For example, the SECURE Act repealed the maximum age for making traditional IRA contributions. Before 2020, traditional IRA contributions weren’t allowed once you reached age 70½. Starting in 2020, an individual of any age can make contributions, as long as he or she has compensation. The required minimum distribution age was also raised from 70½ to 72. In addition, penalty-free withdrawals up to $5,000 are now allowed from a retirement plan for birth or adoption expenses. These are only some of the new law changes. Questions? Don’t hesitate to contact us.
The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) was recently signed into law as part of a larger spending bill. There are several provisions of interest to small businesses that have a retirement plan for employees or are thinking of adding one. For example, unrelated employers will be able to join together to create a retirement plan. Beginning in 2021, new rules will make it easier to create and maintain a multiple employer plan. In addition, there’s an increased tax credit for small employer retirement plan startup costs. And there’s a new small employer automatic plan enrollment credit. These are only some of the provisions in the law. Contact us to learn more.
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.