If you file a joint tax return with your spouse, you should be aware of your individual liability. And if you’re getting divorced, you should know that there may be relief available if the IRS comes after you for certain past-due taxes. When a married couple files jointly, each spouse is liable for the tax on their combined income. That means the IRS can come after either spouse to collect the entire tax, penalties and interest, not just the part that’s attributed to that spouse. In some cases, spouses are eligible for “innocent spouse relief.” Generally, they were unaware of a tax understatement that was attributable to the other spouse. Contact us if you want to try and obtain relief.
IRS audit rates are historically low, according to the latest data, but that’s little consolation if your return is selected. But with proper preparation and planning, you should fare well. But it helps to know what might catch the attention of the IRS. For example, some audit “red flags” are unusually high deductions, major inconsistencies between previous years’ tax returns and the current one, profit margins and expenses markedly different from those of similar businesses. The IRS normally has three years within which to conduct an audit. If the IRS selects you for an audit, we can help you understand the issues, gather the needed documents and respond to the inquiries effectively.
Join us in the fun of our Bay Area Chamber of Commerce Annual meeting on Tuesday, September 29th!!!!
BACC Annual Meeting Watch Party
Here are a few key tax-related deadlines for businesses and other employers during Quarter 4 of 2020. OCT. 15: If you’re the owner or operator of a calendar-year C corp. which filed an extension, file a 2019 income tax return. NOV. 2: Report income tax withholding and FICA taxes for Q3 2020 (unless you’re eligible for a Nov. 10 deadline because you deposited on time (and in full) all of the associated taxes due). DEC. 15: If a calendar-year C corp., pay the fourth installment of 2020 estimated income taxes. Contact us for more about the filing requirements and to ensure you’re meeting all applicable deadlines.
Wealthy Taxpayers May Want to Strategize for Potential Tax Increases
The outcome of the November elections could have a significant impact on taxes for the wealthy. The COVID-19 pandemic has wreaked havoc on the economy, as the government’s tax revenues have declined while government spending has soared. Read more https://www.wf-cpas.com/wf-news/398-wealthy-taxpayers-may-want-to-strategize-for-potential-tax-increases.html
You’re probably aware of the 100% bonus depreciation tax break that’s available for a wide variety of qualifying property. There are some important points to be aware of when it comes to this powerful tax-saving tool. For example, bonus depreciation is available for new and most used property. And it’s scheduled to phase out. Under current law, 100% bonus depreciation will generally be phased out in steps. An 80% rate will apply to property placed in service in 2023, 60% in 2024, 40% in 2025, and 20% in 2026, and a 0% rate will apply in 2027 and later years. Asset depreciation can be a complex area of tax law. Contact us with questions about your situation.
Many people have Series EE savings bonds that were purchased many years ago. Perhaps they were given as gifts or maybe you bought them yourself and filed them away. You may wonder: How is the interest taxed? EE bonds don’t pay interest currently. Instead, accrued interest is reflected in their redemption value. (But owners can elect to have interest taxed annually.) EE bond interest isn’t subject to state income tax. And using the money for higher education may keep you from paying federal income tax on it. Unfortunately, the law doesn’t allow for the tax-free buildup of interest to continue forever. When the bonds reach final maturity, they stop earning interest. Contact us with questions.
Congratulations on your retirement Chris Girard! Thank you for your years of community service with Do-All!
Do-All Inc.
19 hrs ·
After 20 years of service with our organization our long term President / CEO Christopher Girard is passing the leadership batton to Emilia Gutierrez. We appreciate Chris’s dedication and look forward for Emilia’s passion for the success of the individuals we serve.
The Section 179 deduction provides a tax benefit to businesses, enabling them to claim immediate deductions for qualified assets, instead of depreciating them over time. For 2020, the maximum deduction is $1.04 million, subject to a phaseout rule if more than $2.59 million of eligible property is placed in service during the tax year. Even better, the Sec. 179 deduction isn’t the only avenue for immediate tax write-offs for assets such as machinery and equipment. Under the 100% bonus depreciation tax break, the entire cost of eligible assets placed in service in 2020 can be written off this year. Contact us if you want more details about how your business can make the most of the deductions.
Wishing you a safe and Happy Thanksgiving!
Proud to be a sponsor! Buy Local, Buy BC! 🛍️🎄
Bay Area Chamber of Commerce
November 25 at 1:00 PM ·
Buy Local Buy BC this holiday shopping season! Please support Bay County businesses by spending your dollars locally. You can purchase a $25 gift card for only $20 to one of 80 participating Bay County retail, restaurant, or service businesses!
Purchase gift cards here: https://giftup.app/place-order/4f362e78-5e78-439e-9436-df0b53dfce99?platform=Hosted
Thank you to the program sponsors for making this possible! 1st State Bank, Bay Future, Inc., Bay County Growth Alliance, HYMMCO LLC, Independent Bank, Michigan Sugar Company and Weinlander Fitzhugh CPAs
Many employees save taxes by placing funds in their employer’s health or dependent care flexible spending arrangements (FSAs). It’s a good time to review 2020 expenditures and project amounts to be set aside for 2021. A pre-tax contribution of $2,750 to a health FSA is permitted in 2020. To avoid forfeiture of your health FSA funds because of a “use-it-or-lose-it” rule, you must make eligible medical expenditures by the last day of the plan year (Dec. 31 for a calendar year plan), unless the plan allows an optional grace period. Like health FSAs, dependent care FSAs are also generally subject to a use-it-or-lose-it rule. Other rules and exceptions may apply. Contact us with any questions.
S corporations may provide tax advantages over C corporations. This can be true if you expect the business to incur losses because C corp. shareholders generally get no tax benefit from losses. Conversely, S corp. shareholders can deduct their share of these losses on personal tax returns to the extent of their basis in the stock and any loans they make to the entity. So the ability to use losses that pass through from an S corp. depends on your basis in the corporation's stock and debt. Be aware that there are some elections available to an S corp. or its shareholders that can affect the basis adjustments caused by distributions and other events. Contact us if you’d like more information.
If your employer offers a 401(k) or Roth 401(k) plan, contributing to it is a smart way to build a substantial nest egg. If you’re not already socking away the maximum allowed, consider increasing your contribution. With a 401(k), an employee elects to have a certain amount of pay deferred and contributed by an employer on his or her behalf to the plan. The contribution limit for 2020 is $19,500. Employees age 50 or older by year end are also permitted to make additional “catch-up” contributions of $6,500, for a total limit of $26,000 for 2020. The IRS recently announced that the 401(k) contribution limits for 2021 will remain the same as they are for 2020.
Renting Your Home or Vacation Home for Short Periods
Many taxpayers rent out their first or second homes without considering tax consequences. Some of these rules can be beneficial, while others can be very detrimental. If you rent your home to others, then you should be aware of some special tax rules that probably apply to you. Read more https://www.wf-cpas.com/wf-news/417-renting-your-home-or-vacation-home-for-short-periods.html
All of us at Weinlander Fitzhugh wish you a joyous holiday season and a prosperous new year!
If you’re self-employed and don’t have paycheck withholding, you probably have to make estimated tax payments. These payments must be sent to the IRS on a quarterly basis. The 4th 2020 estimated tax payment deadline for individuals is Friday, Jan. 15. Even if you do have some withholding from paychecks or other payments, you may still have to make estimated payments if you receive income such as Social Security, prizes, rent, interest and dividends. Generally, taxpayers send four equal installments. But people who earn income unevenly during the year (for example, from a seasonal business) may be able to send smaller payments. Contact us if you have questions about the estimated tax rules.
The COVID-19 relief law that was signed recently contains many provisions that may affect you. The law provides for direct payments of $600 per eligible individual ($1,200 for a married couple filing jointly), plus $600 per qualifying child. The government has already started making bank direct deposits or mailing checks. Another provision extends a charitable donation tax deduction for individuals who don’t itemize deductions. For 2020, they can take up to a $300 deduction per tax return and for 2021, married joint filers can claim up to $600. These are only a few provisions in the new law. We’ll make sure that you get all the tax breaks you’re entitled to when we prepare your tax return.
Here are a few key tax-related deadlines for businesses during Q1 of 2021. JAN. 15: Pay the final installment of 2020 estimated tax. FEB. 1: File 2020 Forms W-2 with the Social Security Administration and provide copies to employees. Also provide copies of 2020 Forms 1099-MISC to recipients and, if reporting nonemployee compensation in Box 7, file, too. MARCH 1: File 2020 Forms 1099-MISC if not required earlier and paper filing. MARCH 16: If a calendar-year partnership or S corp., file or extend your 2020 tax return. Contact us to learn more about filing requirements and ensure you’re meeting all applicable deadlines.
The COVID-19 relief bill, signed into law on December 27, 2020, contains numerous favorable tax breaks for businesses. For example, the new law includes a provision that removes the 50% limit on deducting business meals provided by restaurants and makes those meals 100% deductible. This rule applies to expenses paid or incurred in calendar years 2021 and 2022. The law also authorizes more money towards the Paycheck Protection Program (PPP) and extends it to March 31, 2021. In addition, it provides for the deductibility of PPP expenses paid with the loan proceeds. These are just a couple of the business-related provisions in the new law. Contact us if you have questions about your situation.
Many businesses suffering from the COVID-19 crisis desperately need the help Payment Protection Plan 2 will offer. Unfortunately, many of those businesses missed out on taking advantage of the first round because they weren’t prepared and couldn’t navigate the process.
Weinlander Fitzhugh can help. The AICPA is estimating the SBA may be prepared to accept applications as early as January 11, 2021. The team at WF can assure you have the required documentation to apply for PPP2 as soon as possible.
Contact us at 800-624-2400 if you have questions or need more information on PPP2!
Bernie is just waiting to e-file 🤣
We extend our congratulations to our friend, Paul Rowley on his 80th year with Rowley Wholesale. Certainly something to be celebrated!!!
https://m.facebook.com/story.php?story_fbid=3591355497580405&substory_index=0&id=114589895257000
Rowleys Wholesale
January 27 at 3:50 PM ·
This young buck has been coming into the warehouse for 80 YEARS! Back in 1949 operations were a lot different. Paul worked with his father, Art, and brother Jim, for many years in the tire, oil, and gasoline retail operations here at Rowleys. Back then Paul would drive the truck down to Detroit and back. Often worrying about “making it back up the hill in Vassar”. Today, Paul’s job entails many functions, one of which includes walking around the facility daily and saying hello and goodbye to every single employee that he can, by name. May we all hope to half as much character and charisma that Paul has at the age of 93. Thank you for your service Paul.
Check out our new video on the 2021 CAA Changes to Paid Sick Leave and FSA's
RESOURCES.WF-CPAS.COM
CAA 2021 Changes to Paid Sick Leave and FSAs | Weinlander Fitzhugh
Check out this video if you are looking for some great information on the Expansion of the Employee Retention Tax Credit
RESOURCES.WF-CPAS.COM
Expansion of the Employee Retention Tax Credit | Weinlander Fitzhugh
https://resources.wf-cpas.com/project/expansion-of-the-employee-retention-tax-credit/
Expansion of the Employee Retention Tax Credit - Weinlander Fitzhugh
https://resources.wf-cpas.com/project/caa-2021-changes-to-paid-sick-leave-and-fsas/
CAA 2021 Changes to Paid Sick Leave and FSAs - Weinlander Fitzhugh
Here is a great Q & A article on the Restaurant Revitalization Fund. Please feel free to share with any food service business you feel might be looking for this information right now.
An eligible entity would be a restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products, or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink.
An entity that is described above and located in an airport terminal or that is a Tribally-owned concern is also eligible.
What we know about the Restaurant Revitalization Fund - Weinlander Fitzhugh
Check out this article for details on the most recent stimulus
RSMUS.COM
President Biden signs American Rescue Plan Act of 2021
Paycheck Protection Program extended to May 31st
RESOURCES.WF-CPAS.COM
Senate passes extension of Paycheck Protection Program to May 31 - Weinlander Fitzhugh
Here is a video regarding the American Rescue Plan Act of 2021
RESOURCES.WF-CPAS.COM
The American Rescue Plan Act of 2021 - Weinlander Fitzhugh
