Call Us Today! (707) 546-0272|info@linkcpa.com

employer

Numerous Tax Limits Affecting Businesses Have Increased For 2020

01_27_20_1096029392_SBTB_560x292

An array of tax-related limits that affect businesses are annually indexed for inflation, and many have increased for 2020. Here are some that may be important to you and your business.

Social Security tax

The amount of employees’ earnings that are subject to Social Security tax is capped for 2020 at $137,700 (up from $132,900 for 2019).

Deductions

  • Section 179 expensing:
    • Limit: $1.04 million (up from $1.02 million for 2019)
    • Phaseout: $2.59 million (up from $2.55 million)
  • Income-based phase-out for certain limits on the Sec. 199A qualified business income deduction begins at:
    • Married filing jointly: $326,600 (up from $321,400)
    • Married filing separately: $163,300 (up from $160,725)
    • Other filers: $163,300 (up from $160,700)

Retirement plans

  • Employee contributions to 401(k) plans: $19,500 (up from $19,000)
  • Catch-up contributions to 401(k) plans: $6,500 (up from $6,000)
  • Employee contributions to SIMPLEs: $13,500 (up from $13,000)
  • Catch-up contributions to SIMPLEs: $3,000 (no change)
  • Combined employer/employee contributions to defined contribution plans (not including catch-ups): $57,000 (up from $56,000)
  • Maximum compensation used to determine contributions: $285,000 (up from $280,000)
  • Annual benefit for defined benefit plans: $230,000 (up from $225,000)
  • Compensation defining a highly compensated employee: $130,000 (up from $125,000)
  • Compensation defining a “key” employee: $185,000 (up from $180,000)

Other employee benefits

  • Qualified transportation fringe-benefits employee income exclusion: $270 per month (up […]
By |March 3rd, 2020|business, deduction, deductions, employer, New Tax Laws, retirement|0 Comments
Read More

Small Businesses: Get Ready for Your 1099-MISC Reporting Requirements

11_11_19_596786432_SBTB_560x292_1

A month after the new year begins, your business may be required to comply with rules to report amounts paid to independent contractors, vendors and others. You may have to send 1099-MISC forms to those whom you pay non-employee compensation, as well as file copies with the IRS. This task can be time consuming and there are penalties for not complying, so it’s a good idea to begin gathering information early to help ensure smooth filing.

Deadline

There are many types of 1099 forms. For example, 1099-INT is sent out to report interest income and 1099-B is used to report broker transactions and barter exchanges. Employers must provide a Form 1099-MISC for non-employee compensation by January 31, 2020, to each non-corporate service provider who was paid at least $600 for services during 2019. (1099-MISC forms generally don’t have to be provided to corporate service providers, although there are exceptions.)

A copy of each Form 1099-MISC with payments listed in box […]

By |November 11th, 2019|1099, business, employer|0 Comments
Read More

Some California Employers in Sonoma and Los Angeles Counties Get Extra Time for Tax Responsibilities

Firefighting

Some California employers in Sonoma and Los Angeles Counties get extra time for tax responsibilities, says the CA Employment Development Dept. (EDD). Those employers who were directly affected by the Kincade and Tick fires, which began on Oct. 23, may request up to a 60-day extension of time from the EDD to file their state payroll reports and deposit payroll taxes without penalty or interest. To get an extension, a written request from the employer must be received within 60 days from the original delinquent date of the payment or return. Please contact your Linkenheimer CPA with questions or for more info: https://bit.ly/331PygJ

By |November 6th, 2019|business, california, employer, Fire Relief Info, relief, tax, tax deadlines|0 Comments
Read More

Small Businesses: Stay Clear of a Severe Payroll Tax Penalty

11_04_19_1068783092_SBTB_560x292

One of the most laborious tasks for small businesses is managing payroll. But it’s critical that you not only withhold the right amount of taxes from employees’ paychecks but also that you pay them over to the federal government on time.

If you willfully fail to do so, you could personally be hit with the Trust Fund Recovery Penalty, also known as the 100% penalty. The penalty applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. Since the taxes are considered property of the government, the employer holds them in “trust” on the government’s behalf until they’re paid over.

The reason the penalty is sometimes called the “100% penalty” is because the person liable for the taxes (called the “responsible person”) can be personally penalized 100% of the taxes due. Accordingly, the amounts the IRS seeks when the penalty is applied are usually substantial, and the IRS is aggressive in enforcing it.

By |November 5th, 2019|business, employer, tax, tax planning|0 Comments
Read More

The “Nanny Tax” Must Be Paid for More Than Just Nannies

07_23_19_GettyImages-964208488_ITB_560x292

You may have heard of the “nanny tax.” But even if you don’t employ a nanny, it may apply to you. Hiring a housekeeper, gardener or other household employee (who isn’t an independent contractor) may make you liable for federal income and other taxes. You may also have state tax obligations.

If you employ a household worker, you aren’t required to withhold federal income taxes from pay. But you may choose to withhold if the worker requests it. In that case, ask the worker to fill out a Form W-4. However, you may be required to withhold Social Security and Medicare (FICA) taxes and to pay federal unemployment (FUTA) tax.

FICA and FUTA tax

In 2019, you must withhold and pay FICA taxes if your household worker earns cash wages of $2,100 or more (excluding the value of food and lodging). If you reach the threshold, all the wages (not just the excess) are subject to FICA.

By |July 23rd, 2019|employer, individuals, tax, tax planning|0 Comments
Read More

The Minimum Wage is to Rise in Sonoma, California

Increase the Minimum Wage

The minimum wage is to rise in Sonoma, California. The city of Sonoma will gradually increase the hourly minimum wage for both small and large employers. Here’s the schedule of hourly rates for employers with up to 25 workers: $12.50 on Jan. 1, 2020; $14.00 on Jan. 1, 2021; $15.00 on Jan. 1, 2022; and $16.00 on Jan. 1, 2023. For larger employers, the schedule of hourly rates is as follows: $13.50 on Jan. 1, 2020; $15.00 on Jan. 1, 2021; $16.00 on Jan. 1, 2022; and $17.00 in 2023. Beginning Jan. 1, 2024, the minimum wage rate for all employees will increase by 3.5%, or a percentage set by a separate Council of the City of Sonoma resolution (whichever is less). Contact your Linkenheimer CPA with your questions.

By |July 15th, 2019|business, employer|0 Comments
Read More

2019 Q3 Tax Calendar: Key Deadlines for Businesses and Other Employers

06_17_19_1029537028_SBTB_560x292

Here are some of the key tax-related deadlines affecting businesses and other employers during the third quarter of 2019. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.

July 31

  • Report income tax withholding and FICA taxes for the second quarter of 2019 (Form 941) and pay any tax due. (See the exception below, under “August 12.”)
  • File a 2018 calendar-year retirement plan report (Form 5500 or Form 5500-EZ) or request an extension.

August 12

  • Report income tax withholding and FICA taxes for the second quarter of 2019 (Form 941), if you deposited on time and in full all of the associated taxes due.

September 16

  • If a calendar-year C corporation, pay the third installment of 2019 estimated income taxes.
  • If a calendar-year S corporation or partnership that filed an automatic six-month extension:
    • File a 2018 income tax return (Form 1120S, Form 1065 or Form 1065-B) and pay any tax, interest and penalties due.
    • Make contributions for 2018 to certain employer-sponsored retirement plans.

If you have any questions about upcoming deadlines, please contact […]

By |June 19th, 2019|business, employer, tax deadlines|0 Comments
Read More

Hiring This Summer? You May Qualify for a Valuable Tax Credit.

Is your business hiring this summer? If the employees come from certain “targeted groups,” you may be eligible for the Work Opportunity Tax Credit (WOTC). This includes youth whom you bring in this summer for two or three months. The maximum credit employers can claim is $2,400 to $9,600 for each eligible employee.

10 targeted groups

An employer is generally eligible for the credit only for qualified wages paid to members of 10 targeted groups:

  • Qualified members of families receiving assistance under the Temporary Assistance for Needy Families program,
  • Qualified veterans,
  • Designated community residents who live in Empowerment Zones or rural renewal counties,
  • Qualified ex-felons,
  • Vocational rehabilitation referrals,
  • Qualified summer youth employees,
  • Qualified members of families in the Supplemental Nutrition Assistance Program,
  • Qualified Supplemental Security Income recipients,
  • Long-term family assistance recipients, and
  • Qualified individuals who have been unemployed for 27 weeks or longer.

For each employee, there’s also a minimum requirement that the employee have completed at least 120 hours of service for the employer, and that employment begin before January 1, 2020.

Also, the credit isn’t available for certain employees who are related to the employer or work more than 50% of the time outside of a trade or business of the employer (for […]

By |June 18th, 2019|business, employer, tax credit|0 Comments
Read More

Employers: Be Aware (or Beware) of a Harsh Payroll Tax Penalty

06_03_19_512552696_SBTB_560x292

If federal income tax and employment taxes (including Social Security) are withheld from employees’ paychecks and not handed over to the IRS, a harsh penalty can be imposed. To make matters worse, the penalty can be assessed personally against a “responsible individual.”

If a business makes payroll tax payments late, there are escalating penalties. And if an employer fails to make them, the IRS will crack down hard. With the “Trust Fund Recovery Penalty,” also known as the “100% Penalty,” the IRS can assess the entire unpaid amount against a responsible person who willfully fails to comply with the law.

Some business owners and executives facing a cash flow crunch may be tempted to dip into the payroll taxes withheld from employees. They may think, “I’ll send the money in later when it comes in from another source.” Bad idea!

No corporate protection

The corporate veil won’t shield corporate officers in these cases. Unlike some other liability protections that a corporation or limited liability company may have, business owners and executives can’t escape personal liability for payroll tax debts.

Once the IRS asserts the penalty, it can file a lien or take levy or seizure action […]

By |June 6th, 2019|employer, social security, tax, tax planning|0 Comments
Read More

We’re Hiring- Staff Accountant and Controller!

LK-119 cropped

Interested in joining a fun, vibrant work culture that puts people first? Want to make an impact on the community, work together as a team to solve client’s financial needs, drink copious amounts of really good, local, organic coffee? Looking to join a company that has won Best Place to Work for 10 years in a row?

We are always looking to add the right folks to our team. If you are interested in a career in accounting, have your CPA license, enjoy a team approach, we might be your match made in heaven.

It’s not all work here either. We serve the community together, build bonds on our annual team retreats and celebrate our successes with our families on annual, company wide vacations. Recent firm trips have included Spain, Croatia, Disneyland and Alaska. We don’t strive for work life balance, we live it and champion for it. We appreciate everyone’s contributions- big or small. Sound enticing? Interested in working at a not-so-typical CPA firm? Let us know if our creative accounting culture might be right for you.

For more info on the open positions we have, visit www.linkcpa.com/join-our-team/

By |May 22nd, 2019|best place to work, cpa firm, employer, firm|0 Comments
Read More