Meals & Entertainment Expenses

business expenses taxes Sep 08, 2020

Head over to our Facebook page for a good refresher on deducting meals and entertainment expenses on your taxes, in light of the last round of tax reform.

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Facing Foreclosure? Here are Some Tax Issues You May Confront

As part of the CARES Act, Congress provided temporary relief for homeowners with federally backed mortgages who were financially impacted by COVID-19. For those unable to keep up with their home mortgage payments, the relief provides mortgage forbearance and a moratorium against foreclosures through August 31, 2020. As related to mortgages, the term “forbearance” means an agreement between a lender and borrower to delay foreclosure while giving the borrower time to catch up on overdue mortgage payments.

As this pandemic continues to wreak havoc on people’s finances, the Federal Housing Finance Agency said that Fannie Mae and Freddie Mac will extend foreclosure moratoriums to December 31, 2020 and perhaps longer.

If, because of the pandemic, you cannot make your payments and have not already done so, you should contact your lender to request forbearance for your loan payments. Your lender may allow temporarily lower mortgage payments or pause payments altogether,...

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Is the Temporary Employee Payroll Tax Deferral Worth It?

President Trump issued a Presidential Memorandum on August 8, 2020, that directs the Treasury Secretary to use his authority to defer the withholding, deposit and payment of employees’ portions of Social Security taxes from September 1 through December 31, 2020. The goal is to put more money in the pockets of workers during the COVID-19 pandemic emergency. The deferral applies to the 6.2% tax on wages or compensation paid for a bi-weekly pay period of less than $4,000 or the equivalent threshold amount for other pay periods. In other words, employees with annual wages up to $104,000 are generally eligible for the deferral.

Just a few days before the start of the deferral period, the IRS has issued guidance explaining that the due date for withholding and paying Social Security taxes has been postponed; they are now due between January 1, 2021 and April 30, 2021. This means that Social Security taxes not withheld in the last 4 months of 2020 are to be ratably withheld from...

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Overview Summary of Trump and Biden Tax Plans

We recently posted materials contrasting the Trump and Biden tax proposals, but you can head over to our LinkedIn page at the link below and download a high-level, textual summary of all of the tax laws in question and candidates' competing viewpoints on each one of them.  It's a handy tool for any tax planning you might be doing for post-election.  

Also, check out the rest of our September newsletter -- it's packed with great estate and tax planning tips.

See the summary and newsletter here.

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Are You Paying Too Much Interest on Your Home Mortgage?

Interest rates are currently at an all-time low, and it may be time for you to consider refinancing your existing home mortgage to take advantage of these lower rates. Doing so may substantially reduce your monthly mortgage payments. As you know if you have been watching the ads, some lenders are offering rates as low as 2.75%.

If you are thinking about refinancing your current home loan, consider the tax ramifications before making your decision, as the 2018 tax reform made some changes that may impact it. Home mortgage debt can consist of acquisition debt and equity debt. Acquisition debt is the debt you incur to purchase your home or make substantial improvements to the home. Equity debt is debt secured by the home that you use for other purposes not related to acquiring your home. Prior to 2018, homeowners could deduct the interest paid (up to $100,000 of equity debt) as an itemized deduction. However, with the passage of tax reform, the interest on home equity debt is no longer...

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September 2020 Individual Due Dates Reminder

tax planning taxes Aug 27, 2020

September 1 - 2020 Fall and 2021

Tax Planning Contact this office to schedule a consultation appointment.

September 10 - Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during August, you are required to report them to your employer on IRS Form 4070 no later than September 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

September 15 - Estimated Tax Payment Due

The third installment of 2020 individual estimated taxes is due. Our tax system is a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the...

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IRS Extends Capital Gains Deferral Opportunity

As part of tax reform put into place a couple of years ago, individuals are able to defer both short- and long-term capital gains into what are referred to as Qualified Opportunity Zone Funds (QOFs). What is nice about this is that only the actual amount of gain needs to be invested into a QOF to avoid taxes on the gain for the sale year. The gains invested in a QOF are deferred until you cash out of the QOF investment or December 31, 2026, whichever occurs first.

This includes the gain from the sale of all capital assets, such as stocks or bonds, property, rentals, land, and even partnership interests.

Example: You sell 1,000 shares of stock that cost you $20 a share (a total cost of $20,000). You were very fortunate, and the stock had appreciated to $100 a share when you sold them, for a total sales price of $100,000 and a capital gain of $80,000. If you invest the $80,000 gain in a QOF within the required 180 days, the gain on the sale and the tax on the gain are postponed.

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September 2020 Business Due Dates Reminder

business tax planning taxes Aug 25, 2020

September 15 - S Corporations

File a 2019 calendar year income tax return (Form 1120-S) and pay any tax due. This due date applies only if you requested an automatic 6-month extension. Provide each shareholder with a copy of K-1 (Form 1120-S) or a substitute Schedule K-1.

September 15 - Corporations 

Deposit the third installment of estimated income tax for 2020 for calendar year

September 15 -  Social Security, Medicare and Withheld Income Tax

If the monthly deposit rule applies, deposit the tax for payments in August.

September 15 - Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in August.

September 15 - Partnerships

File a 2019 calendar year return (Form 1065). This due date applies only if you were given an additional 5-month extension. Provide each partner with a copy of K-1 (Form 1065) or a substitute Schedule K-1.

September 30 - Fiduciaries of Estates and Trusts

File a 2019 calendar year return (Form 1041). This due date...

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Nexus Laws for Remote Employees Due to COVID-19

congress covid-19 nexus taxes Aug 24, 2020

Ever since the coronavirus pandemic began impacting the United States, businesses around the country have responded by instituting work-from-home policies. While it is unclear how much longer the nation will be in the grips of the crisis, social distancing is likely to remain in place for many organizations. Some of the country’s most recognizable brands, including Facebook and Google, have already announced a work-from-home option that will extend through July 2021 for all of their employees, while others have made the ability to work remotely permanent.

As more and more organizations make the decision that their staff members can work from home either permanently or on a long-term basis, they may need to take a closer look at how nexus will be addressed — especially as several state governments are beginning to address work-from-home employees in terms of nexus and on tax revenue.

Traditionally, a state tax obligation is established when a business has a physical...

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Trump and Biden Tax Plans: Summary & Infographic

Yesterday we posted about the comprehensive summary Bloomberg had created regarding the tax proposals put forth by President Trump and candidate Joe Biden.  Check out this article for a higher-level summary of the proposals with a great infographic for quick reference.  

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