Here are some key tax-related deadlines for businesses and other employers during Quarter 3 of 2019. JULY 31: Report income tax withholding and FICA taxes for Q2 2019 (unless eligible for an Aug. 12 deadline). File a 2018 calendar-year retirement plan report or request an extension. SEPT. 16: If a calendar-year partnership or S corp. that filed an extension, file a 2018 income tax return. If a calendar-year C corp., pay the third installment of 2019 estimated income taxes. bit.ly/2KniTfW
If you hire from certain “targeted groups” and get proper certification, you can claim the Work Opportunity Tax Credit (WOTC) on your 2019 tax return. You can claim it for eligible workers whose employment begins before January 1, 2020. Targeted groups include qualified veterans, eligible summer youth, the long-term unemployed, ex-felons and certain government assistance recipients. The maximum credit employers can claim ranges from $2,400 to $9,600 per hire. (For the $9,600 credit, an employee must be a veteran entitled to compensation for a service-connected disability and be unemployed for at least six months during the one-year period ending on the hiring date.) bit.ly/2MM9r7S
If payroll taxes withheld from employees’ paychecks aren’t remitted to the IRS, a severe tax penalty can be personally imposed on “responsible” individuals. The IRS can assess a penalty of 100% of the unpaid tax amount on shareholders, owners, directors, officers, employees and others. The Trust Fund Recovery Penalty (or “100% Penalty”) is assessed when there’s a willful failure to collect and pay over to the IRS taxes that are withheld from employees. Unlike some liability protections that a corporation or company may have, business execs can’t escape personal liability for payroll tax debts. bit.ly/2WGnOhD
You may be going on a business trip in the United States this summer that you can tack some vacation days onto. If you’re a business owner or self-employed, you may be able to deduct some of your expenses. Transportation costs to and from the business activity location may be 100% deductible if the primary reason for the trip is business. Out-of-pocket expenses for business days are generally fully deductible. Examples include lodging, meals (subject to the 50% disallowance rule), seminar and convention fees, and cab fare. It’s important to keep good records in case you’re audited. Additional rules and limits apply. bit.ly/2Wz60VZ
Congratulations to our very own Katelyn Olson and Andrew Beyeler for completing the Casper Half Marathon yesterday! Way to go!
Wishing you a happy and safe Memorial Day! May we always remember those who made the ultimate sacrifice for our freedom.
If you’re a business owner with children, hiring them for the summer can provide many benefits. One is tax savings. By shifting business income to a child as wages for services performed, you can turn your high-taxed income into tax-free or low-taxed income. You may also be able to realize payroll tax savings (depending on the child’s age and how your business is organized) and enable retirement plan contributions for the children. Everybody wins! Many rules apply. bit.ly/2VC1a5D
If you want another retirement savings option to add to your company’s benefits package, consider a Roth 401(k). But make sure employees use it. The Plan Sponsor Council of America found that Roth 401(k)s are available at 70% of employer plans, but only 20% of participants who had access to one in 2017 made contributions to it. These plans have traits of both Roth IRAs and employer-sponsored 401(k)s. Contributions to an employee’s Roth 401(k) account are made with after-tax, instead of pretax, dollars. But after five years, qualified distributions are exempt from federal income tax (the same as with a Roth IRA). In contrast, regular 401(k) distributions are taxed at ordinary-income rates of up to 37%. bit.ly/2E6bBZs
