New Tax Laws - Linkenheimer LLP CPAs & Advisors

The History of April 15th and Tax Day

April 15 isn’t most Americans’ favorite day, and that’s because most years, it’s the official, federal tax deadline (for the first time in 65 years, tax day now falls on a different day, July 15, 2020) . Tax Day, as it’s called, has a long and interesting history in the States that goes all the way back to Abe Lincoln’s leadership. Federal income tax was introduced with the Revenue Act of 1861 to help fund the Civil War, and subsequently repealed, re-adopted, and held unconstitutional. The early taxes were based on assessments, not voluntary tax returns. Tax payment dates varied by act.

1861: The First Federal Income Tax

Abraham Lincoln, who was an American president from 1861 to 1865, proclaimed the first federal income tax his first year in office. 1861—particularly August 5—is the historical day that marks the future-changing decision. At the time, Lincoln announced a 3% tax rate for anyone who made over $800 a year (roughly $24,000 with today’s inflation). The decision was made to help fund the Union’s efforts during the civil war. Though we are still being taxed today, Lincoln’s tax system was repealed in 1871.

1894: Tariff Act of 1894 Rules […]

By Linkenheimer LLP|2020-09-03T20:03:05+00:00April 15th, 2020|irs, Linkenheimer, New Tax Laws, tax deadlines|0 Comments

What Are The Key Distinctions Between Layoffs And Furloughs?

As businesses across the country grapple with the economic fallout from the novel coronavirus (COVID-19) pandemic, many must decide whether to downsize their workforces to lower payroll costs and stabilize cash flow. If your company is contemplating such a move, you’ll likely want to consider the choice within the choice: that is, should you lay off workers or furlough them?

Basic difference

The basic difference between the two is simple. Layoffs are the ostensibly permanent termination of employees from their positions, though you can rehire some of these individuals when business improves. Meanwhile, a furlough is a mandatory or voluntary suspension from work without pay for a specified period.

In most states, furloughed workers are still considered employees and, therefore, don’t receive a “final” paycheck. Check with an employment or labor attorney, however, to make sure your state’s furlough laws don’t trigger final pay requirements.

Employee benefits are another issue to explore. Reach […]

By Linkenheimer LLP|2020-09-03T20:03:06+00:00April 15th, 2020|business, New Tax Laws, tax deadlines, tax implications|0 Comments

California Tax Updates for April 15th

Post 1:

Special tax relief is available for certain filing and payment deadlines, said the California Franchise Tax Board (FTB), in response to the coronavirus (COVID-19). The FTB has posted on its website a spreadsheet of certain filing and payment deadlines for all individuals and businesses entities. The spreadsheet has been updated to include information on real estate withholding, nonresident, nonwage, withholding and foreign partner or member withholding. https://bit.ly/2yoWpGK

Post 2:

Small California businesses get interest-free payment plans for sales tax, effective April 2. Governor Gavin Newsom is allowing businesses with sales less than $5 million to defer payment of sales and use taxes, up to $50,000, for up to 12 months, said the CA Dept. of Tax and Fee Administration (CDTFA) (other help may also be available for larger tax liabilities). For taxpayers choosing to defer their first quarter 2020 liability, for example, their tax liability would be paid in 12 monthly installments, […]

By Linkenheimer LLP|2020-09-03T20:03:06+00:00April 15th, 2020|business, ca, CA tax, california, New Tax Laws, tax deadlines|0 Comments

COVID-19: IRS Announces More Relief And Details

In the midst of the coronavirus (COVID-19) pandemic, Americans are focusing on their health and financial well-being. To help with the impact facing many people, the government has provided a range of relief. Here are some new announcements made by the IRS.

More deadlines extended

As you probably know, the IRS postponed the due dates for certain federal income tax payments — but not all of them. New guidance now expands on the filing and payment relief for individuals, estates, corporations and others.

Under IRS Notice 2020-23, nearly all tax payments and filings that would otherwise be due between April 1 and July 15, 2020, are now postponed to July 15, 2020. Most importantly, this would include any fiscal year tax returns due between those dates and any estimated tax payments due between those dates, such as the June 15 estimated tax payment deadline for individual taxpayers.

Economic Impact Payments for nonfilers

You have also likely heard about the cash payments the federal government is making to individuals under certain income thresholds. The Coronavirus Aid, Relief, and Economic Security (CARES) Act will provide an eligible individual with a cash payment equal to the sum of: $1,200 […]

By Linkenheimer LLP|2020-09-03T20:03:07+00:00April 14th, 2020|irs, New Tax Laws, relief, tax deadlines|0 Comments

Relief From Not Making Employment Tax Deposits Due To COVID-19 Tax Credits

The IRS has issued guidance providing relief from failure to make employment tax deposits for employers that are entitled to the refundable tax credits provided under two laws passed in response to the coronavirus (COVID-19) pandemic. The two laws are the Families First Coronavirus Response Act, which was signed on March 18, 2020, and the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, which was signed on March 27, 2020.

Employment tax penalty basics

The tax code imposes a penalty for any failure to deposit amounts as required on the date prescribed, unless such failure is due to reasonable cause rather than willful neglect.

An employer’s failure to deposit certain federal employment taxes, including deposits of withheld income taxes and taxes under the Federal Insurance Contributions Act (FICA) is generally subject to a penalty.

COVID-19 relief credits

Employers paying qualified sick leave wages and qualified family leave wages required by the Families First Act, as well as qualified health plan expenses allocable to qualified leave wages, are eligible for refundable tax credits under the Families First Act.

Specifically, provisions of the Families First Act provide a refundable tax credit against an employer’s share of the Social […]

By Linkenheimer LLP|2020-09-03T20:03:07+00:00April 13th, 2020|employer, irs, New Tax Laws, relief, tax cuts, tax deductions, tax planning|0 Comments