4 Common Tax Errors That Can Be Costly For Small Businesses

IRS TAX TIP 2019-164 Four common tax errors that can be costly for small businesses A small business owner often wears many different hats. They might have to wear their boss hat one day, and the employee hat the next. When tax season comes around, it might be their tax hat. They may think of doing their taxes as just another item to quickly cross off their to-do list. However, this approach could leave taxpayers open to mistakes when filing and paying taxes. Accidentally failing to comply with tax laws, violating tax codes, or filling out forms incorrectly can leave taxpayers and
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2020 Tax Year Inflation Adjustments

IR-2019-180, November 6, 2019 WASHINGTON — The Internal Revenue Service today announced the tax year 2020 annual inflation adjustments for more than 60 tax provisions, including the tax rate schedules and other tax changes. Revenue Procedure 2019-44 (PDF) provides details about these annual adjustments. The tax law change covered in the revenue procedure was added by the Taxpayer First Act of 2019, which increased the failure to file penalty to $330 for returns due after the end of 2019. The new penalty will be adjusted for inflation beginning with tax year 2021. The tax year 2020 adjustments generally are used on tax
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Tax Treatment For Family Members

In October, the IRS posted a new Fact Sheet, FS-2019-14 concerning tax treatment for family members.  You can read the entire tax tip below: One of the advantages of someone running their own business is hiring family members. But when including family members in business operations, certain tax treatments and employment tax rules apply. Here are some facts to know when working with a spouse, parent or child. Both spouses carrying on the trade or business If spouses carry on a business together and share in the profits and losses, they may be partners whether or not they have a
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IRS Tax Tip 2019-116: These Tax Tips Can Help New Business Owners Find Success

These tax tips can help new business owners find success Starting a business can be very rewarding. It can also be a little overwhelming. From business plans to market strategies, and even tax responsibilities…there are many things to consider. Here’s what new business owners can do to help get off to a good start. Choose a business structure. The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are: Sole proprietorship: An unincorporated business owned by an individual. There’s no distinction between the taxpayer and their business. Partnership: An unincorporated
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IRS Tax Tip 2018-248 Concerning Required Retirement Plan Distributions

IRS reminder: Deadline Dec. 31 for most retirees who must make required retirement plan distributions WASHINGTON — The Internal Revenue Service today reminded retirees born before July 1, 1948, that they usually must take distributions from their individual retirement arrangements (IRAs) and workplace retirement plans by Dec. 31. The payments, called required minimum distributions (RMDs), are normally made by the end of the year. Those who reached age 70½ during 2018 are covered by a special rule that allows them to wait until April 1, 2019, to take their first RMDs. This means that those born after June 30, 1947,
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New Child Tax Credit Amounts

The IRS posted Tax Reform Tax Tip 2018-182 concerning child tax credits.  The Tax Tip provided the following information:  The new law increases the child tax credit from $1,000 to $2,000. Eligibility for the credit has not changed. As in past years, the credit applies if all of these apply: the child is younger than 17 at the end of the tax year, December 31, 2018 the taxpayer claims the child as a dependent the child lives with the taxpayer for at least six months of the year Credit refunds. The credit is refundable, now up to $1,400. If a
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IR-2018-211

401(k) contribution limit increases to $19,000 for 2019; IRA limit increases to $6,000 WASHINGTON — The Internal Revenue Service today announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019.  The IRS today issued technical guidance detailing these items in Notice 2018-83. Highlights of Changes for 2019 The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000. The limit on annual contributions to an IRA, which last increased in 2013, is increased from $5,500 to $6,000.
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