The following table provides some important federal tax information for 2020, as compared with 2019. Some of the dollar amounts are unchanged and some changed only slightly due to inflation. Social Security/ Medicare 2020 2019 Social Security Tax Wage Base $137,700 $132,900 Medicare Tax Wage Base No limit No limit Employee portion of Social Security… Continue reading
News & Updates
SECURE Act Affects Retirement and Tax Planning for Individuals
On December 20, President Trump signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act. It was part of the Further Consolidated Appropriations Act federal spending package. In general, the SECURE Act is intended to expand opportunities for individuals to increase their retirement savings and to simplify the administration of retirement plans.… Continue reading
New Tax Law Provides 10 Key Breaks for Individual Taxpayers
A recent spending package signed into law by President Trump on December 20 retroactively resurrects and/or extends several key tax breaks through 2020. It also provides tax relief for victims of federally declared disasters. Here are ten breaks that can benefit eligible individuals. 1. Reduced Threshold for Medical Expense Deductions The Tax Cuts and Jobs… Continue reading
New Spending Law Contains Holiday Surprises
On December 20, President Trump signed into law the annual government spending package, which includes amendments to the tax law, the repeal of certain Affordable Care Act (ACA) taxes and various retirement measures. Here’s an overview of key changes that will affect businesses and individual taxpayers. Tax Provisions The Further Consolidated Appropriations Act is an omnibus spending package… Continue reading
Ensure You Qualify for Charitable Donation Deductions
Giving to charity may provide you with a warm feeling as well as a nice tax break. But you must itemize deductions on your tax return, which fewer taxpayers will do under the Tax Cuts and Jobs Act. And, like most tax breaks, charitable deductions come with a number of other rules you must follow… Continue reading
Handle with Care: The Nanny Tax Rules
When you hire a nanny, housekeeper or other domestic worker, pay close attention to the tax rules. The laws related to domestic workers are confusing and poorly understood, but ignoring them can land you in hot water—even decades from now. Over the years, there have been news stories about political appointees and others who got… Continue reading
FAQs About Self-Employment Tax
Do you owe self-employment (SE) tax on nonwage income that you collect only occasionally or in a one-off circumstance? Some sources of income may not be subject to the dreaded SE tax. Here’s what you should know if you earn income from “irregular” sources. What Is SE Tax? SE tax is the way the U.S.Treasury… Continue reading
What Employers Should Know About HSAs
Health Savings Accounts (HSAs) are a tax-smart way to cover an individual’s uninsured medical expenses. Your business can set up HSAs for qualifying employees. Then the business can fully or partially fund the accounts or let employees fund them with salary-reduction contributions. While it’s too late to add HSAs to your benefits package for 2019,… Continue reading
How to Reduce the Tax Hit on Soon-to-Be-Developed Land
In many places, real estate prices are soaring. That’s good news for owners of undeveloped land in those areas. But if they decide to subdivide and develop highly appreciated property, it could trigger a whopping income tax bill. Fortunately, there’s a way to reduce the tax hit: Set up an S corporation to develop and sell… Continue reading
Open Enrollment: Make the Most of Your Health Care Benefits Options
It’s open enrollment season at many companies. If you’re lucky enough to work for a company that lets workers choose from a menu of health care plans, review your options carefully. Though it’s easy to stick with what you’re familiar with, a lot is at stake, both financially and in terms of the quality of… Continue reading
