withholding - Linkenheimer LLP CPAs & Advisors

Conduct A “Paycheck Checkup” To Make Sure Your Withholding Is Adequate

Did you recently file your federal tax return and were surprised to find you owed money? You might want to change your withholding so that this doesn’t happen next year. You might even want to do that if you got a big refund. Receiving a tax refund essentially means you’re giving the government an interest-free loan.

Withholding changes

In 2018, the IRS updated the withholding tables that indicate how much employers should hold back from their employees’ paychecks. In general, the amount withheld was reduced. This was done to reflect changes under the Tax Cuts and Jobs Act — including an increase in the standard deduction, suspension of personal exemptions and changes in tax rates.

The tables may have provided the correct amount of tax withholding for some individuals, but they might have caused other taxpayers to not have enough money withheld to pay their ultimate tax liabilities.

Review and possibly adjust

The IRS is advising taxpayers to review their tax situations for this year and adjust withholding, if appropriate.

The tax agency has a withholding calculator to assist you in conducting a paycheck checkup. The calculator reflects tax law changes in areas such as available itemized […]

By Linkenheimer LLP|2020-09-03T20:02:15+00:00July 15th, 2020|child, deduction, deductions, individuals, irs, tax planning|0 Comments

2019 Q4 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 fourth quarter of 2019. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact your Linkenheimer CPA to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.

October 15

If a calendar-year C corporation that filed an automatic six-month extension:
- File a 2018 income tax return (Form 1120) and pay any tax, interest and penalties due.
- Make contributions for 2018 to certain employer-sponsored retirement plans.

October 31

Report income tax withholding and FICA taxes for third quarter 2019 (Form 941) and pay any tax due. (See exception below under “November 12.”)

November 12

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

December 16

If a calendar-year C corporation, pay the fourth installment of 2019 estimated income taxes.

By Linkenheimer LLP|2020-09-03T20:03:40+00:00September 11th, 2019|extension, tax deadlines|0 Comments

IRS Unveils New Tax Withholding Estimator

The IRS has unveiled its latest online tool, the “Tax Withholding Estimator.” The estimator, which replaces the “Withholding Calculator,” assists workers, retirees, self-employed individuals, and other taxpayers in determining how much income tax should be withheld from wages and pension payments. Among other things, the estimator features (1) plain language to improve user comprehension; (2) a mobile-friendly design; (3) enhanced tips and links on various tax credits and deductions; and (4) an automatic calculation of the taxable portion of any Social Security benefits. In addition, the tool makes it easier to enter wages and withholding for each job held by the taxpayer and his or her spouse. The IRS encourages all taxpayers to use the tool to do a “Paycheck Checkup” and review their withholding for 2019. The new estimator is available at www.irs.gov/individuals/irs-tax-withholding-estimator . If you have questions about withholdings and your tax estimates, please contact your Linkenheimer CPA.

By Linkenheimer LLP|2020-09-03T20:03:45+00:00August 9th, 2019|irs, withhold|0 Comments

IRS Releases 2019 Form W-4

The IRS has released the 2019 version of Form W-4 (Employee’s Withholding Allowance Certificate) and instructions. Initial plans called for substantial revisions to the form to take into account provisions of the Tax Cuts and Jobs Act. However, after considering feedback from the payroll and tax communities, the IRS decided to postpone the form’s makeover until the 2020 tax year. Therefore, the 2019 form is similar to the 2018 version. However, the Form W-4 Deductions, Adjustments, and Additional Income Worksheet has been updated to reflect the increase in the annual withholding allowance from $4,150 to $4,200 in 2019. Also, the worksheet has been updated for the increase in the standard deduction for 2019 from (1) $24,000 to $24,400 for joint filers and surviving spouses; (2) $18,000 to $18,350 for heads of household; and (3) $12,000 to $12,200 for single filers and married individuals filing separately. The 2019 Form W-4 can be accessed at www.irs.gov/pub/irs-pdf/fw4.pdf .

By Linkenheimer LLP|2020-09-03T20:04:22+00:00December 26th, 2018|irs|0 Comments

Do You Need to Make an Estimated Tax Payment by September 17?

To avoid interest and penalties, you must make sufficient federal income tax payments long before your April filing deadline through withholding, estimated tax payments, or a combination of the two. The third 2018 estimated tax payment deadline for individuals is September 17.

If you don’t have an employer withholding tax from your pay, you likely need to make estimated tax payments. But even if you do have withholding, you might need to pay estimated tax. It can be necessary if you have more than a nominal amount of income from sources such as self-employment, interest, dividends, alimony, rent, prizes, awards or the sales of assets.

A two-prong test

Generally, you must pay estimated tax for 2018 if both of these statements apply:

You expect to owe at least $1,000 in tax after subtracting tax withholding and credits, and
You expect withholding and credits to be less than the smaller of 90% of your tax for 2018 or 100% of the tax on your 2017 return — 110% if your 2017 adjusted gross income was more than $150,000 ($75,000 for married couples filing separately).

If you’re a sole proprietor, partner or S corporation shareholder, you generally have to make estimated tax […]

By Linkenheimer LLP|2020-09-03T20:04:29+00:00September 10th, 2018|New Tax Laws, tax planning, withhold|0 Comments