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Employers: Be aware (or beware) of a harsh payroll tax penalty

If federal income tax and employment taxes (including Social Security) are withheld from employees’ paychecks and not handed over to the IRS, a harsh penalty can be imposed. To make matters worse, the penalty can be assessed personally against a “responsible individual.” If a business makes payroll tax payments late, there are escalating penalties. And…

Targeting and converting your company’s sales prospects

Companies tend to spend considerable time and resources training and upskilling their sales staff on how to handle existing customers. And this is, no doubt, a critical task. But don’t overlook the vast pool of individuals or entities that want to buy from you but just don’t know it yet. We’re talking about prospects. Identifying…

Depreciation Limits for Business Passenger Autos

2019 – 05/23 The IRS has issued depreciation limits for business passenger autos (including trucks and vans) placed in service in 2019. IRS Revenue Procedure 2019-26 provides that, for vehicles acquired before September 28, 2017, and placed in service in 2019, the depreciation limits are $10,100 for the first year ($14,900 with bonus depreciation), $16,100…

Tax Consequences for Certified Professional Employer Organizations

2019 – 05/24 The IRS has issued final regulations that spell out federal employment tax consequences for certified professional employer organizations (CPEOs) and their customers. Small businesses often contract with these employee leasing companies to ensure compliance with workplace laws and regulations. Typically, the CPEO computes the FICA, withholding tax, worker’s compensation, and 401(k) contributions…

Summer Job? How Much Should I Withhold?

2019 – 05/24 Do you work multiple jobs or are you adding a summer job this year? The IRS suggests that you conduct a “paycheck checkup” to learn if you’re having the right amount of tax withheld from your paycheck. The Tax Cuts and Jobs Act made changes that might affect the taxes you owe….

Build long-term relationships with CRM software

Few businesses today can afford to let potential buyers slip through the cracks. Customer relationship management (CRM) software can help you build long-term relationships with those most likely to buy your products or services. But to maximize your return on investment in one of these solutions, you and your employees must have a realistic grasp…

Is it a Hobby or a Business?

2019 – 05/23 Your passion for abstract painting brings you great joy. You’ve participated in art shows and even sold a few paintings to friends. You recently launched an instructional blog where you share tips and techniques. You think of painting as a part-time career. As your expenses for paint, studio space, and web hosting…

Hire your children this summer: Everyone wins

If you’re a business owner and you hire your children (or grandchildren) this summer, you can obtain tax breaks and other nontax benefits. The kids can gain on-the-job experience, save for college and learn how to manage money. And you may be able to: Shift your high-taxed income into tax-free or low-taxed income, Realize payroll…

The simple truth about annual performance reviews

There are many ways for employers to conduct annual performance reviews. So many, in fact, that owners of small to midsize businesses may find the prospect of implementing a state-of-the-art review process overwhelming. The simple truth is that smaller companies may not need to exert a lot of effort on a complex approach. Sometimes a…

How long do I keep records?

2019 – 05/09 Are you eager to spring clean your stacks of records? Not so fast. While you can safely dispose of some records eventually, all employment tax records must be kept by businesses for at least four years after filing the fourth quarter for the year. They must be available for IRS review upon…

Employer provided vehicles

2019 – 05/09 In Notice 2019-34, the IRS has provided the maximum value of an employer-provided vehicle, first made available to employees for personal use in calendar year 2019, for which the vehicle cents-per-mile valuation rule or the fleet-average valuation rule may be applied. The maximum 2019 value is $50,400. The Tax Cuts and Jobs…

Buy vs. lease: Business equipment edition

Life presents us with many choices: paper or plastic, chocolate or vanilla, regular or decaf. For businesses, a common conundrum is buy or lease. You’ve probably faced this decision when considering office space or a location for your company’s production facilities. But the buy vs. lease quandary also comes into play with equipment. Pride of…

Alternate Tax Approach for Undeveloped Land

2019 – 05/07 As I reflect on the 2018 tax season with its many tax law changes, I see several planning opportunities that may benefit clients. One of the most significant of these relates to the $10,000 limitation on the deduction for state and local taxes. As this cap affects almost every client we serve,…

©2019 Bland Garvey CPA