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Choosing A Retirement Plan For Your Small Business

Most growing small businesses reach a point where the owner looks around at the leadership team and says, “It’s time. We need to offer employees a retirement plan.”

Often, this happens when the company is financially stable enough to administer a retirement plan and make substantive contributions. Other times it occurs when the business grows weary of losing good job candidates because of a less-than-impressive benefits package.

Whatever the reason, if you don’t have a retirement plan and see one in your immediate future, you’ll want to carefully select the one that will work best for your company and its employees. Here are some basics about three of the most tried-and-true plans.

401(k) plans offer flexibility

Available to any employer with one or more employees, a 401(k) plan allows employees to contribute to individual accounts. Contributions to a traditional 401(k) are made pretax, reducing taxable income, but distributions are taxable.

Both employees and employers can contribute. For 2023, employees can contribute up to $22,500 (up from $20,500 in 2022). Participants who are age 50 or older by the end of the year can make an additional “catch-up” contribution of $7,500 (up from $6,500 in 2022). Within limits, employers […]

By Linkenheimer LLP|2022-12-08T16:37:29+00:00December 8th, 2022|retirement, small business|0 Comments

Small Businesses: There Still May Be Time To Cut Your 2021 Taxes

Don’t let the holiday rush keep you from considering some important steps to reduce your 2021 tax liability. You still have time to execute a few strategies.

Purchase assets

Thinking about buying new or used equipment, machinery or office equipment in the new year? Buy them and place them in service by December 31, and you can deduct 100% of the cost as bonus depreciation. Contact us for details on the 100% bonus depreciation break and exactly what types of assets qualify.

Bonus depreciation is also available for certain building improvements. Before the 2017 Tax Cuts and Jobs Act (TCJA), bonus depreciation was available for two types of real property: land improvements other than buildings (for example fencing and parking lots), and “qualified improvement property,” a broad category of internal improvements made to nonresidential buildings after the buildings are placed in service. The TCJA inadvertently eliminated bonus depreciation for qualified improvement property. However, the 2020 CARES Act made a retroactive technical correction to the […]

By Linkenheimer LLP|2021-12-07T19:10:08+00:00December 7th, 2021|business, deductions, small business, tax deductions, vehicles|0 Comments

California Tax Updates for 9/29

Update 1:

A lucrative new business tax credit may help California’s small businesses hit hard by economic disruption in 2020 and 2021. Governor Gavin Newsom has signed the Main Street Small Business Tax Credit II bill providing financial relief to qualified businesses that have suffered unprecedented job losses. The credit, which can be up to $150,000 per employer, can be used against income taxes or by an irrevocable election, applied to sales and use taxes. To qualify, businesses must have had no more than 500 employees on Dec. 31, 2020, whose wages were subject to CA withholding laws. They must also have seen a decrease of at least 20% in gross receipts. Here are the details: https://bit.ly/3CA61dy

Update 2:

The California Trucking Association (CTA) seeks help from the U.S. Supreme Court. In 2020 the CA worker classification law (AB5) took effect. It applies the ABC test to determine whether workers are employees or independent contractors, with […]

By Linkenheimer LLP|2021-09-29T22:53:20+00:00September 29th, 2021|business, CA tax, covid-19, tax credit|0 Comments

EIDL Program Retooled for Still-Struggling Small Businesses

For many small businesses, the grand reopening is still on hold. The rapid spread of the Delta variant of COVID-19 has mired a variety of companies in diminished revenue and serious staffing shortages. In response, the Small Business Administration (SBA) has retooled its Economic Injury Disaster Loan (EIDL) program to offer targeted relief to eligible employers.

A brief history

The EIDL program was in place well before 2020. However, the federal government has ramped up the initiative’s visibility while trying to help small businesses during the pandemic.

With the entire country essentially declared a disaster area, the CARES Act established an enhanced EIDL program for small businesses affected by COVID-19. It offered lower interest rates, longer repayment terms and a streamlined application process.

The American Rescue Plan Act upped the ante, offering eligible companies targeted EIDL advances that are excluded from the gross income of the person who receives the funds. The law stipulates that no […]

By Linkenheimer LLP|2021-09-24T18:04:20+00:00September 24th, 2021|business, eidl, sba, small business|0 Comments

2021 Q3 Tax Calendar: Key Deadlines for Businesses and Other Employers

Here are some of the key tax-related deadlines affecting businesses and other employers during the third quarter of 2021. 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.

Monday, August 2

Employers report income tax withholding and FICA taxes for second quarter 2021 (Form 941) and pay any tax due.
Employers file a 2020 calendar-year retirement plan report (Form 5500 or Form 5500-EZ) or request an extension.

Tuesday, August 10

Employers report income tax withholding and FICA taxes for second quarter 2021 (Form 941), if you deposited all associated taxes that were due in full and on time.

Wednesday, September 15

Individuals pay the third installment of 2021 estimated taxes, if not paying income tax through withholding (Form 1040-ES).
If a calendar-year corporation, pay the third installment of 2021 estimated income taxes.
If a calendar-year S corporation or partnership that filed an automatic extension:
- File a 2020 income tax return (Form 1120S, Form 1065 or Form 1065-B) and pay any tax, interest and penalties due.
- Make contributions for 2020 […]

By Linkenheimer LLP|2021-06-14T22:05:29+00:00June 14th, 2021|tax deadlines|0 Comments