Update on Deducting Business Meal and Entertainment Expenses
The federal income tax treatment of business-related meal and entertainment expenses has been a moving target the last few years. If you’re confused about what rules currently apply, you’re not alone. Here’s a refresher on what’s currently deductible — and what’s not. TCJA Impact Before the Tax Cuts and Jobs Act (TCJA) went into effect, […]
New Tax Law Improves QCD Benefits
Seniors who must take withdrawals from their IRAs may be able to benefit from a special tax provision for qualified charitable distributions (QCDs). Briefly stated, this provision allows people in their 70s and older to transfer funds directly from an IRA to a charity without any adverse tax consequences. The new SECURE 2.0 law enhances […]
Federal Tax News for Individuals
Crypto Investors: Loss Deductions, Regulation and Oversight There have been three recent developments in the cryptocurrency arena: 1. Loss tax deductions for FTX investors. Investors with inaccessible assets tied up in cryptocurrency exchange FTX Trading Ltd. will need to wait until court proceedings conclude before learning if loss tax deductions will be available. FTX filed […]
Important Tax Figures for 2023
Every year, the amounts allowed for various federal tax benefits are subject to change based on inflation adjustments and legislation. Here are some tax figures for 2023, compared with 2022, including the estate tax exemption, Social Security wage base, qualified retirement plan and IRA contribution limits, driving deductions and more. Good news: Many increases are […]
Guidance on CT’S New Mandatory Retirement Savings Program
Dear Clients, Business Associates and Friends, The State of Connecticut enacted legislation in 2016 to address the lack of retirement planning options available to private sector employees. This legislation created the Connecticut Retirement Security Authority (CRSA), which implemented MyCTSavings, a state-sponsored retirement savings program for employees whose employers do not offer a retirement savings plan. The […]
Critical IRS Update: Retain These Two Letters
A critical update from IRS Senior Stakeholder Liaison Joe McCarthy: With preparations for the next tax season starting there is something important you should be aware of. The IRS will be sending out two letters to taxpayers in January: Letter 6419 – Advance Child Tax Credit Payments Letter 6475 – Economic Impact (stimulus) Payment It is […]
Beware of Fraudulent Letters About Unpaid Tax Debt
Attorney General William Tong and Department of Revenue Services Commissioner Mark D. Boughton today are warning Connecticut consumers of a scam in which they receive a threatening letter about unpaid federal tax debts. The fraudulent letter claims to be from a “Tax Processing Unit” in a Connecticut county and threatens legal action for unpaid taxes […]
Eligible Parents Will Begin Receiving Advance Child Tax Credits July 15th
Dear Clients, Business Associates and Friends, The 2021 advance child tax credit (CTC) payments, which were established under a recent law, will begin being made on July 15, 2021, the IRS announced. The tax agency also stated that “roughly 39 million households – covering 88% of children in the United States – are slated to begin […]
A More Valuable Employee Retention Credit for 2021
Have you evaluated whether your business qualifies for the Employee Retention Credit? The Federal program has been modified twice in the past six months, so if you have not kept up with the changes you may find that you qualify for payroll tax credits based on continuing wage payments. The threshold for qualifying in 2021 […]
Which States Are Opting Out of Federal Unemployment Benefits?
In recent weeks, many employers have complained about how difficult it is to fill job openings. The country is returning to normalcy, with COVID-19 cases drastically falling, yet some businesses can’t get all their workers to come back. Maryland recently joined 24 other states in ending the $300 per week federal unemployment benefits in a […]
Maximize Social Security Benefits When You Retire
Get the most from Social Security. Younger retirees face a harsh penalty for working part-time. For every $2 earned over $18,960 in 2021 (up from $18,240 in 2020), you lose $1 in Social Security benefits. In the year you reach full retirement age, a higher earnings threshold applies. Your benefits will be reduced by $1 […]
Coronavirus Stimulus Package Update
On December 21, Congress passed the Consolidated Appropriations Act of 2021 (CAA), which provides pandemic relief, as well as other tax and health-related provisions. White House aides had indicated that President Trump would sign the massive 5,500-plus page bill. However, late on December 22, President Trump indicated that he might not sign the bill because of […]
Overtime Pay Rules for Fluctuating Workweeks
If you pay employees who are nonexempt and who have fluctuating workweeks, there’s a formula you can use to calculate their overtime pay. The formula is laid out in newly revised U.S. Department of Labor (DOL) regulations, and it adheres to the Fair Labor Standards Act (FLSA) overtime pay framework. However, you don’t need to […]
Employee or Independent Contractor? The Rules May Be Getting Simpler
From an employer perspective, using independent contractors provides greater flexibility in managing variable demands for particular services. And, frequently, those services can be obtained more economically because independent contractors don’t receive employee benefits, nor are the companies that use them subject to the employer share of those workers’ FICA taxes. And yet, depending on market […]
Home Office Deductions in the COVID-19 Era
Have you been working from home during the COVID-19 crisis? Join the club. Approximately 42% of the American workforce is currently working from home full-time, according to a recent study by the Stanford Institute for Economic Policy Research. Only 26% are working on business premises — and many of those are essential workers, such as […]
DOs and DON’Ts to Help Avoid Collection Problems
Many companies run into problems with customers or clients not paying their bills on time — or not paying at all. The best way to avoid uncollectible bills depends on several factors — such as whether you sell products or services and the type of payment practices that are customary in your industry. For example, […]
PPP Loan Update
On June 16th, the Small Business Administration issued a revised PPP loan forgiveness application along with a new simplified “EZ” version that can be used in certain circumstances. Both forgiveness applications are designed for an 8-week to 24-week ”covered period”. Businesses and individuals with PPP loans can choose which covered period works best for them. […]
Tax Tips for Individuals Who Haven’t Filed a Return for 2019
As part of the federal government’s tax relief measures during the COVID-19 pandemic, the IRS extended key deadlines for the 2019 tax year and for making 2020 estimated tax payments until July 15, 2020. If your 2019 personal return is still awaiting completion, you may have significant retroactive tax-planning flexibility. Postponed Due Dates The IRS […]
Is it Time to Reopen Your Business? 10 Questions to Ask Yourself
Businesses across America that have been shut down due to the novel coronavirus (COVID-19) pandemic may now (or soon) have the option to reopen. Since no two businesses are alike — even those in the same industry and location — what makes sense for one company could be a disaster for another. But many questions […]
SBA provides safe harbor for PPP loans under $2 million
Businesses that together with their affiliates accepted Paycheck Protection Program (PPP) funds of less than $2 million will be assumed to have performed the required certification concerning the necessity of their loan requests in good faith, according to guidance posted by the U.S. Small Business Administration (SBA) on Wednesday May 13, 2020. According to the […]
Paycheck Protection Program Loans – Best Practices
Many small business owners have applied for these PPP loans, and have recently, or are just about to, receive the funding. We would like to provide some best practices as it comes to spending and tracking these funds. Establish a separate bank account for the PPP funds. Use this account to pay permitted expenses […]
CARES Act Provides Four Possible Reasons to File an Amended Return
The $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act delivers good news to individuals and businesses, including valuable tax-relief measures. Some of that tax relief is retroactive. These provisions can affect 2018 and 2019 returns that have already been filed. One retroactive provision can, in some cases, go all the way back to […]
COVID-19 Relief for Employers: New Employee Retention Tax Credit
The coronavirus (COVID-19) pandemic has shut down many sectors of the U.S. economy, causing widespread job losses. Over 10 million Americans applied for unemployment benefits in March, according to the U.S. Department of Labor. And far more claims are expected in April. Some economists predict that the unemployment rate could rise to Depression-era levels of […]
7 Valuable Tax Credits for Small Businesses
Many people are familiar with tax credits for individual taxpayers, such as the credits for higher education expenses or the child tax credit. But businesses and business owners also may be eligible for some valuable credits that can lower their tax bills. Here are seven credits for small business owners to consider this tax year […]
Deducting Medical Expenses for 2019 and Beyond
Under current tax law, medical expenses can be deducted as an itemized deduction on your federal income tax return only to the extent that they exceed 7.5% of adjusted gross income (AGI). This AGI threshold was in place for 2017 and 2018 under the Tax Cuts and Jobs Act (TCJA). And now it’s been extended […]
Stretch IRAs Lose Potency under the SECURE Act
The Setting Every Community Up for Retirement Enhancement (SECURE) Act contains a number of favorable provisions that will help Americans save more for retirement. However, the new law also contains an unfavorable provision that will affect nonspouse IRA beneficiaries who inherit accounts with substantial balances. As a result, some carefully constructed estate plans will be […]
New Tax Law Provides 10 Key Breaks for Individual Taxpayers
A recent spending package signed into law by President Trump on December 20 retroactively resurrects and/or extends several key tax breaks through 2020. It also provides tax relief for victims of federally declared disasters. Here are ten breaks that can benefit eligible individuals. 1. Reduced Threshold for Medical Expense Deductions The Tax Cuts and Jobs […]
The Gender Pay Gap: How Does Your Company Measure Up?
The gender pay gap persists, despite recent improvements. Census data over the past decade indicates that, on average, women earn roughly 80 to 85 cents for every dollar earned by men in comparable job positions. This is a hot topic in political circles. But it can be a problem at your company — even […]
Do Your Kids Know the Value of a Silver Spoon?
You taught them how to read and how to ride a bike, but have you taught your children how to manage money? One study of 2016 college graduates found they carried on average $37,172 in student loan debt. And more than one in ten of them will either default or be delinquent in repaying those […]
Prepare to Receive a Social Security Administration No-Match Letter
The SSA explains that it’s seeking to reconcile discrepancies between the names and Social Security Numbers (SSNs) it has on file with the names and SSNs that employers report. The purpose isn’t to support enforcement of immigration law, but rather to “properly post employees’ earnings to the correct record.” That’s an important distinction because if […]