An S corporation could cut your self-employment tax

May 25, 2021

If your business is organized as a sole proprietorship or as a wholly owned limited liability company (LLC), you’re subject to both income tax and self-employment tax. There may be a way to cut your tax bill by conducting business as an S corporation. Fundamentals of self-employment tax The self-employment tax is imposed on 92.35%…

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Look at your employee handbook with fresh eyes

May 19, 2021

For businesses, so much has changed over the past year or so. The COVID-19 pandemic hit suddenly and companies were forced to react quickly — sending many employees home to work remotely and making myriad other tweaks and revisions to their processes. Understandably, you may not have fully documented all the changes you’ve made. But…

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Who qualifies for “head of household” tax filing status?

May 17, 2021

When you file your tax return, you must check one of the following filing statuses: Single, married filing jointly, married filing separately, head of household or qualifying widow(er). Who qualifies to file a return as a head of household, which is more favorable than single? To qualify, you must maintain a household, which for more…

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The 2020 tax filing deadline is coming up: Do you need an extension?

May 13, 2021

“Tax day” is just around the corner. This year, the deadline for filing 2020 individual tax returns is Monday, May 17, 2021. The IRS postponed the usual April 15 due date due to the COVID-19 pandemic. If you still aren’t ready to file your return, you should request a 2020 tax filing extension. Anyone can…

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Help ensure the IRS doesn’t reclassify independent contractors as employees

May 10, 2021

Many businesses use independent contractors to help keep their costs down. If you’re among them, make sure that these workers are properly classified for federal tax purposes. If the IRS reclassifies them as employees, it can be a costly error. It can be complex to determine whether a worker is an independent contractor or an…

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ARPA tax break may make child care less expensive

May 6, 2021

The new American Rescue Plan Act (ARPA) provides eligible families with an enhanced child and dependent care credit for 2021. This is the credit available for expenses a taxpayer pays for the care of qualifying children under the age of 13 so that the taxpayer can be gainfully employed. Note that a credit reduces your…

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Changes to premium tax credit could increase penalty risk for some businesses

May 5, 2021

The premium tax credit (PTC) is a refundable credit that helps individuals and families pay for insurance obtained from a Health Insurance Marketplace (commonly known as an “Exchange”). A provision of the Affordable Care Act (ACA) created the credit. The American Rescue Plan Act (ARPA), signed into law in March 2021, made several significant enhancements…

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Did you make donations in 2020? There’s still time to get a deduction

May 4, 2021

If you’re like many Americans, letters from your favorite charities may be appearing in your mailbox acknowledging your 2020 donations. But what happens if you haven’t received such a letter — can you still claim a deduction for the gift on your 2020 income tax return? It depends. What is required To support a charitable…

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Business highlights in the new American Rescue Plan Act

April 30, 2021

President Biden signed the $1.9 trillion American Rescue Plan Act (ARPA) on March 11. While the new law is best known for the provisions providing relief to individuals, there are also several tax breaks and financial benefits for businesses. Here are some of the tax highlights of the ARPA. The Employee Retention Credit (ERC). This…

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The Restaurant Revitalization Fund

March 26, 2021

The $1.9 trillion COVID-19 relief bill enacted on March 11, 2021, the American Rescue Plan Act of 2021 (ARP), established a $28.6 billion Restaurant Revitalization Fund (RRF), which will be administered by the Small Business Administration (SBA). Funding for the New Program Of the $28.6 billion set aside for the RRF, $23.6 billion is available…

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