IRS posts 2020 inflation adjustments and tax tables
The IRS released the 2020 tax tables for individuals and estates and trusts, as well the inflation adjustments for over 60 tax provisions for 2020 tax returns.Managing payroll is a laborious task for small businesses. But itâs critical to withhold the right amount of taxes from employees and pay them over to the federal government on time. If you donât, you could be hit with the Trust Fund Recovery Penalty, also known as the 100% penalty. It applies to the Social Security and income taxes required to be withheld by a business from its employeesâ wages. Itâs called the 100% penalty because people liable or responsible for the taxes can be personally penalized 100% of the taxes due. Absolutely no failure to withhold and no âborrowingâ from withheld amounts should ever be allowed in your business. bit.ly/2WIevvo
The right entity choice can make a difference in the taxes you owe for your business. Although S corporations can provide substantial tax advantages over C corporations in some situations, there are potential tax problems you should assess before deciding to convert from C to S status. One of the issues to consider is last-in, first-out (LIFO) inventory. A C corporation that uses LIFO inventory must pay tax on the benefits it derived by using LIFO if it converts to an S corporation. Other issues to understand are the built-in gains tax, passive income tax and unused net operating losses. We can explain how these factors will affect your company and develop strategies to minimize taxes.
Today we celebrated National Boss's Day with a wonderful breakfast arranged by our staff, including some delectable treats from Wind City Sweets & Treats! We are so blessed to have an entire office full of wonderful people and we can't thank them enough for all they do!
Happy Boss’s day to you all!
Given the escalating cost of employee health care benefits, your business may be interested in setting up an employer-sponsored Health Savings Account (HSA). For eligible individuals, HSAs offer a tax-advantaged way to set aside funds (or have their employers do so) to meet future medical needs. To be eligible, an individual must be covered by a âhigh deductible health plan.â For 2019, a âhigh deductible health planâ is one with an annual deductible of at least $1,350 for self-only coverage, or at least $2,700 for family coverage. An HSA provides a number of tax benefits for your business and its employees. bit.ly/2Bn2Nwx
Employers must pay federal unemployment tax on amounts up to $7,000 paid to each employee as wages during the year. The tax rate is 6% but it can be reduced by a credit for contributions paid into state unemployment funds. Typically, the more claims made against a business, the higher the unemployment tax bill. But there may be ways to control costs. Donât hire employees to fill short-term jobs. To avoid layoffs, use temps. If you must hire, do so carefully to increase the chance that employees will work out. And if you terminate someone, provide severance and outplacement services, which may delay the start of unemployment benefits and cause them to end sooner. bit.ly/30YKFDc
