sandiegocpas-blog

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New law provides a variety of tax breaks to businesses and employers

While you were celebrating the holidays, you may have missed a law that passed with a grab bag of provisions providing tax relief to businesses and employers. It makes many changes to the tax code, including an extension (generally through 2020) of provisions that were set to expire or already expired. For example, the law extended the employer tax credit for paid family and medical leave through 2020, as well as the Work Opportunity Tax Credit for hiring individuals who are members of targeted groups. It also repealed the “Cadillac tax” on high-cost employer-sponsored health coverage. These are only a few provisions of the new law. If you have questions, don’t hesitate to contact us. http://bit.ly/2T1N0Ky Please like our page for more tax tips and savings.

[sandiegocpas-blog]

New law provides a variety of tax breaks to businesses and employers

While you were celebrating the holidays, you may have missed a law that passed with a grab bag of provisions providing tax relief to businesses and employers. It makes many changes to the tax code, including an extension (generally through 2020) of provisions that were set to expire or already expired. For example, the law extended the employer tax credit for paid family and medical leave through 2020, as well as the Work Opportunity Tax Credit for hiring individuals who are members of targeted groups. It also repealed the “Cadillac tax” on high-cost employer-sponsored health coverage. These are only a few provisions of the new law. If you have questions, don’t hesitate to contact us. http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.

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Your home office expenses may be tax deductible

Technology has made it easier to work from home. However, just because you have a home office doesn’t mean you can deduct expenses associated with it on your tax return. In order to be deductible, you must be self-employed and the space must be used regularly and exclusively for business purposes. If you qualify, there are two options for a deduction. You can deduct a portion of your mortgage interest, property taxes, insurance, utilities and certain other expenses, as well as the depreciation allocable to the office space. This requires calculating and substantiating actual expenses. Alternatively, you can take a “safe harbor” deduction. Other rules and limits apply. Contact us for details. http://bit.ly/2T1N0Ky Please like our page for more tax tips and savings.

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2019 - 12/23 - Wayfair revisited — It’s time to review your sales tax obligations

In a 2018 decision, the U.S. Supreme Court expanded the power of states to collect sales tax from remote sellers. Today, nearly every state with a sales tax has enacted a similar law. So if your company does business across state lines, it’s a good idea to reexamine your sales tax obligations. If you make online, telephone or mail-order sales in states where you lack a physical presence, it’s critical to find out whether those states have economic nexus laws and determine whether your activities are enough to trigger them. If you have nexus with a state, you must register and collect state and applicable local taxes on your taxable sales there. If you need assistance, contact us. http://bit.ly/2T1N0Ky Please like our page for more tax tips and savings.

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Is it time to change employee performance reviews?

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San Francisco is seeking comments regarding the city’s minimum wage rules for certain workers. The workers in question are employed by contractors and tenants at the San Francisco International Airport. The law, known as the Minimum Compensation Ordinance (MCO), generally requires covered employers to provide their covered employees no less than the MCO hourly wage ($17.66 for for-profit employers and $16.50 for public entities, currently). Also required are 12 paid days off per year (or cash equivalent) and 10 days off without pay per year. Submit by email to mco@sfgov.org. Comments must be received by Jan. 9, 2020, at 10 a.m. Or get more information here: http://bit.ly/2Tdu0Ms https://bit.ly/34TAT8c Please like our page for more tax tips and savings.

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California changes the rules on extensions to file. The CA Franchise Tax Board (FTB) has issued a notice stating that it will allow an automatic seven-month extension to file a return (no request needed) if the return is filed within seven months of the original due date. This period extends to all taxpayers in good standing, filing Forms 100 (CA Corporation Franchise or Income Tax Return) for taxable years that began on or after Jan. 1, 2019. It doesn’t apply to S corporations, so that the extended due date remains the fifteenth day of the ninth month after the close of the taxable year. Note: an extension of time to file is not an extension of time to pay. Contact us with questions. http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.

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Do you have a side gig? Make sure you understand your tax obligations

The number of people engaged in the “gig” or sharing economy has grown in recent years. And there are tax consequences for the people who perform these jobs, such as providing car rides, renting spare rooms, delivering food and walking dogs. Generally, if you receive income from these gigs, it’s taxable. That’s true even if the income comes from a side job and if you don’t receive a 1099-MISC or 1099-K form reporting the money you made. You may need to make quarterly estimated tax payments because your income isn’t subject to withholding. Some or all of your business expenses may be deductible on your tax return, subject to the normal tax limitations and rules. Contact us to learn more. http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.

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Small Businesses: It may not be not too late to cut your 2019 taxes

Don’t let the holiday rush keep you from taking some important steps to reduce your 2019 tax liability. You still have time to execute a few strategies. For example, are you thinking about purchasing new or used heavy vehicles, heavy 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. Or you can put recurring expenses normally paid early in the year on your credit card before Jan. 1. That way, you can claim the deduction for 2019 even though you don’t pay the bill until 2020. Finally, before year-end, contribute to a SEP or 401(k) if you haven’t reached the contribution limit. http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.

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If you’re a California employer who owes payroll tax payments, there’s news for you. The Employment Development Dept. has partnered with PayNearMe to offer employers the option to make payroll tax payments with cash. This means you can still meet the state’s electronic payment requirement without the need of a bank account or credit card. Since 2018, CA employers have been required to pay all payroll taxes electronically. Using PayNearMe, you can make cash payroll tax payments up to $1,000 per transaction and $2,500 per day. Contact us with questions or click here for more details: http://bit.ly/2Tdu0Ms https://bit.ly/2L15Wax Please like our page for more tax tips and savings.

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New reporting requirements will soon be in place for California tobacco products distributors. The CA Dept. of Tax and Fee Administration (CDTFA) has announced that, effective Jan. 1, 2020, these distributors must report the wholesale cost of electronic cigarettes and vaping products that contain nicotine separately from the wholesale cost of all other tobacco products they distribute. They will also be required to report total sales of e-cigarettes and vaping products that contain nicotine by customer. Forms and schedules will be revised accordingly. The new reporting requirements are based on an executive order by Governor Gavin Newsom and the authority of the CDTFA. http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.

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Adopting a child? Bring home tax savings with your bundle of joy

If you’re adopting a child, or you adopted one this year, there may be significant tax benefits available to offset the expenses. For 2019, adoptive parents may be able to claim a nonrefundable credit against their federal tax for up to $14,080 of “qualified adoption expenses” for each adopted child. (This amount is increasing to $14,300 for 2020.) The credit allowable for 2019 is phased out for taxpayers with adjusted gross income (AGI) of $211,160 ($214,520 for 2020). It is eliminated when AGI reaches $251,160 for 2019 ($254,520 for 2020). We can help ensure that you meet all the requirements to get the full benefit of the tax savings available to adoptive parents. http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.

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2020 Q1 tax calendar: Key deadlines for businesses and other employers

Here are a few key tax-related deadlines for businesses during Q1 of 2020. JAN. 31: File 2019 Forms W-2 with the Social Security Administration and provide copies to employees. Also provide copies of 2019 Forms 1099-MISC to recipients and, if reporting non-employee compensation in Box 7, file, too. FEB. 28: File 2019 Forms 1099-MISC if not required earlier and paper filing. MAR. 16: If a calendar-year partnership or S corp., file or extend your 2019 tax return. Contact us to learn more about filing requirements and ensure you’re meeting all applicable deadlines. http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.

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Don't let e-commerce fraud steal your holiday spirit

We wish you a safe and happy holiday. Be aware of holiday scams and shop local when you can!

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Employees in Menlo Park, California, will soon see a minimum wage raise. Effective Jan. 1, 2020, employees who work at least two hours per week within the city will receive an hourly minimum wage increase to $15.00. Beginning in Jan. 2021, any annual minimum wage adjustments will be based on inflation related to the Consumer Price Index for the San Francisco-Oakland-Hayward region. The minimum wage rate applies to all businesses subject to the city’s business license requirements minimum wage rate, except federal, state and county government agencies, including school districts, when the work is related to their government function. http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.

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California businesses that collect sales tax from customers must correctly report the sales and remit the tax on time or face a possible 25% fraud penalty. The CA Dept. of Tax and Fee Administration (CDTFA) found that one restaurant owner significantly under reported sales and underpaid the related sales tax. On that basis, the CDTFA determined that he was not only subject to the 25% fraud penalty, but that he also met the criteria for a higher penalty of 40%. That is, evidence showed he knowingly collected sales tax to be remitted and failed to remit the full tax collected; also, the amount exceeded an established threshold. The CA Office of Tax Appeals upheld the penalty. (Madfish,11/6/19) http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.

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3 last-minute tips that may help trim your tax bill

You may still have time to reduce your federal tax liability by taking certain steps. For example, contribute the maximum to your retirement plans by year end, including traditional IRAs and SEP plans. Another idea: If you make your Jan. 2020 payment this month, you can deduct the interest portion on your 2019 tax return (assuming you itemize deductions on your tax return). You can also “harvest” any investment losses by Dec. 31. If you have more losses than gains, you generally can apply up to $3,000 of the excess to reduce your ordinary income. Any remaining losses are carried forward to future tax years. Contact us if you want to discuss ways to minimize your 2019 tax liability. http://bit.ly/2Tdu0Ms Please like our page for more tax tips and savings.