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IRS Reminds Employers, Other Businesses of Jan. 31 Filing Deadline

The Internal Revenue Service today reminds employers and other businesses of the Jan. 31 filing deadline that applies to filing wage statements and independent contractor forms with the government.

The Protecting Americans from Tax Hikes (PATH) Act requires employers to file their copies of Form W-2, Wage and Tax Statement, and Form W-3, Transmittal of Wage and Tax Statements, with the Social Security Administration by Jan. 31. The Jan. 31 deadline also applies to certain Forms 1099-MISC, Miscellaneous Income, filed with the IRS to report non-employee compensation to independent contractors. Such payments are reported in box 7 of this form.

This deadline makes it easier for the IRS to verify income that individuals report on their tax returns and helps prevent fraud. Failure to file these forms correctly and timely may result in penalties. As always, the IRS urges employers and other businesses to take advantage of the accuracy, speed and convenience of filing these forms electronically.

An extension of time to file Forms W-2 is no […]

By Linkenheimer LLP|2020-09-03T20:04:19+00:00January 29th, 2019|irs, w2|0 Comments

Depreciation & Expensing Provisions in the PATH Act

Depreciation & Expensing Provisions in the PATH Act

The PATH Act makes permanent the enhanced Code Sec. 179 expensing and phaseout limits, and 15-year write-off for qualifying leasehold improvements, restaurant buildings and improvements, and retail improvements. In addition, the Act provides for a retroactive extension of provisions that had expired at the end of 2014, including 50% bonus first-year depreciation (at a rate that gradually decreases). For further information and to discuss whether your purchase is a “qualifying property”, please contact us.

Enhanced Expensing Made Permanent

Under pre-Act law. For tax years beginning after Dec. 31, 2014, the maximum expensing limit had dropped to $25,000, and the investment ceiling dropped to $200,000.

New law. The Act makes the following changes to the Code Sec. 179 expensing election:

The $500,000 expensing limitation and $2 million phase-out amounts are retroactively extended and made permanent. After Dec. 31, 2015, both the expensing and phase-out limits are indexed for inflation.
The rule that allows expensing for computer software is retroactively extended and made permanent.
Qualified real property (generally qualified leasehold improvements, qualified restaurant, and qualified retail property) is eligible to be expensed.
For tax years beginning after Dec. 31, 2015, air conditioning and heating units are eligible for expensing.

15-Year Write-off for Qualified Leasehold and Retail Improvements and Restaurant Property Made Permanent

Under […]

By Linkenheimer LLP|2020-09-03T20:05:17+00:00January 12th, 2016|depreciation, expensing, irs|0 Comments

PATH Act Changes to the Research Credit

The recently enacted “Protecting Americans from Tax Hikes Act of 2015” (i.e., the 2015 PATH Act) contains a provision making permanent the popular research credit. This credit encourages businesses to invest more in R&D by allowing a tax credit for spending on qualified research. The credit (1) is for 20% of current year qualified spending that exceeds a base amount related to gross receipts in certain earlier years and (2) can’t exceed 10% of the total spending in the current year on qualified research. Alternatively, taxpayers can irrevocably choose a simpler calculation.

The credit had lapsed for expenditures in 2015, but the legislation is also effective for those expenditures.

And importantly, the new law also makes two major changes to the credit, both favorable to small businesses. First, it provides that beginning in 2016 eligible small businesses ($50 million or less in gross receipts) may claim the credit against alternative minimum tax (AMT) liability. Also, beginning in 2016, the new law also provides that the credit can be used by certain even smaller businesses against the employer’s portion of the Social Security portion of the employer’s payroll tax (i.e., FICA) liability.

By Linkenheimer LLP|2020-09-03T20:05:18+00:00December 31st, 2015|research credit|0 Comments

New PATH Act Provides Major Benefits to Businesses in 2015

With only two weeks remaining until the end of the year, Congress passed the Protecting Americans from Tax Hike (PATH) Act of 2015, which reinstates a large number of tax provisions that had expired in 2014, many of which were not just renewed, but made permanent, while some of the other provisions are extended through 2016, and in some cases, 2019. This gift from Congress comes just in time for the holidays and will have a significant impact on tax payers and businesses. Below are some of the major provisions worth noting. And because California does not conform to some of these tax breaks, please contact us so we can help with your individual and year-end tax planning.

Highlights of the PATH Act:

$622 Billion Tax Break Package
Over 100 Separate Provisions
Permanent Research Tax Credit, Code Sec. 179 Expensing and AOTC (American Opportunity Tax Credit)
Five-Year Extension for Bonus Depreciation
Delay of Excise Tax on “Cadillac” Plans
Moratorium on Medical Device Excise Tax
Overall Major IRS Reform

Permanent Extensions for Individuals

Earned income tax credit
American Opportunity Tax Credit
Child tax credit
Option to to deduct state and local sales and use taxes instead of state and local income taxes
Teachers classroom expense deductions
Charitable distributions for IRAs
Qualified […]

By Linkenheimer LLP|2020-09-03T20:05:18+00:00December 29th, 2015|congress, extension, extensions, irs|0 Comments