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Giving Back During the Holidays at the Redwood Empire Food Bank

On Tuesday, December 3rd, the team from Linkenheimer, along with significant others and kids, met up after work at the Redwood Empire Food Bank to lend a helping hand. Holiday months are always tough for REFB in terms of finding volunteers, so we were excited to be able to participate and assist a great local non-profit that has been serving Sonoma County for over a decade, providing meals to elderly, children and those in need. Over the course of our two hours there, we formed into teams to put to sort through and box bread and baked goods. In total, we boxed 3, 697 lbs of bread to be sent out in the community. This helps provide over 2,900 meals to be distributed to our neighbors in need. Local charities like these are what makes Sonoma County such a great place to live and do business in and we are proud to support them. So during these busy holiday months, we encourage everyone to take some time and think about how they can give back and help those less fortunate. If everyone does a little, the impact can be huge. Happy Holidays from the Linkenheimer […]

By Linkenheimer LLP|2020-09-03T20:03:24+00:00December 12th, 2019|Community|0 Comments

Some of Your Deductions May Be Smaller (or Nonexistent) When You File Your 2018 Tax Return

While the Tax Cuts and Jobs Act (TCJA) reduces most income tax rates and expands some tax breaks, it limits or eliminates several itemized deductions that have been valuable to many individual taxpayers. Here are five deductions you may see shrink or disappear when you file your 2018 income tax return:

1. State and local tax deduction. For 2018 through 2025, your total itemized deduction for all state and local taxes combined — including property tax — is limited to $10,000 ($5,000 if you’re married and filing separately). You still must choose between deducting income and sales tax; you can’t deduct both, even if your total state and local tax deduction wouldn’t exceed $10,000.

2. Mortgage interest deduction. You generally can claim an itemized deduction for interest on mortgage debt incurred to purchase, build or improve your principal residence and a second residence. Points paid related to your principal residence also may be deductible. […]

By Linkenheimer LLP|2019-02-19T21:15:36+00:00February 19th, 2019|deduction, deductions, New Tax Laws|0 Comments

How to Avoid Getting Hit with Payroll Tax Penalties

For small businesses, managing payroll can be one of the most arduous tasks. Adding to the burden earlier this year was adjusting income tax withholding based on the new tables issued by the IRS. (Those tables account for changes under the Tax Cuts and Jobs Act.) But it’s crucial not only to withhold the appropriate taxes — including both income tax and employment taxes — but also to remit them on time to the federal government.

If you don’t, you, personally, could face harsh penalties. This is true even if your business is an entity that normally shields owners from personal liability, such as a corporation or limited liability company.

The 100% penalty

Employers must withhold federal income and employment taxes (such as Social Security) as well as applicable state and local taxes on wages paid to their employees. The federal taxes must then be remitted to the federal government according to a deposit schedule.

If a business makes payments late, there are escalating penalties. And if it fails to make them, the Trust Fund Recovery Penalty could apply. Under this penalty, also known as the 100% penalty, the IRS can assess the entire unpaid amount against a […]

By Linkenheimer LLP|2020-09-03T20:04:36+00:00July 9th, 2018|employer, income tax, tax|0 Comments

Factor in State and Local Taxes When Deciding Where to Live in Retirement

Many Americans relocate to another state when they retire. If you’re thinking about such a move, state and local taxes should factor into your decision.

Income, property and sales tax

Choosing a state that has no personal income tax may appear to be the best option. But that might not be the case once you consider property taxes and sales taxes.

For example, suppose you’ve narrowed your decision down to two states: State 1 has no individual income tax, and State 2 has a flat 5% individual income tax rate. At first glance, State 1 might appear to be much less expensive from a tax perspective. What happens when you factor in other state and local taxes?

Let’s say the property tax rate in your preferred locality in State 1 is 5%, while it’s only 1% in your preferred locality in State 2. That difference could potentially cancel out any savings in state income taxes in State 1, depending on your annual income and the assessed value of the home.

Also keep in mind that home values can vary dramatically from location to location. So if home values are higher in State 1, there’s an even greater chance that […]

By Linkenheimer LLP|2020-09-03T20:04:39+00:00June 6th, 2018|income tax, retirement, tax|0 Comments

State and Local Tax Deduction Limited

Under pre-Act law, taxpayers could deduct from their taxable income as an itemized deduction several types of taxes paid at the state and local level, including real and personal property taxes, income taxes, and/or sales taxes.

New law. For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, subject to the exception described below, State, local, and foreign property taxes, and State and local sales taxes, are deductible only when paid or accrued in carrying on a trade or business or an activity described in Code Sec. 212 (generally, for the production of income). State and local income, war profits, and excess profits are not allowable as a deduction.

However, a taxpayer may claim an itemized deduction of up to $10,000 ($5,000 for a married taxpayer filing a separate return) for the aggregate of (i) State and local property taxes not paid or accrued in carrying on a trade or business or activity described in Code Sec. 212; and (ii) State and local income, war profits, and excess profits taxes (or sales taxes in lieu of income, etc. taxes) paid or accrued in the tax year. Foreign real property taxes may not be deducted. (Code Sec. 164(b)(6), as amended by Act Sec. […]

By Linkenheimer LLP|2020-09-03T20:04:47+00:00January 9th, 2018|CA tax, income tax, New Tax Laws, property tax, state income|0 Comments