Still have questions after you file your tax return?
After filing a tax return, you may have questions. 1) When will you receive your refund? Go to irs.gov and click on “Get Your Refund Status” to find out. 2) How long should you save tax records? In general, save records for three years after filing although you should keep the actual returns indefinitely. However, there are exceptions to this general rule. 3) If you overlooked claiming something on your return, can you still claim a refund for it? You can generally file an amended return to claim a refund within three years after the date you filed the original return or two years of the date you paid the tax, whichever is later.
An S corporation could cut your self-employment tax
If your business is organized as a sole proprietorship or a wholly owned limited liability company, you’re subject to both income tax and self-employment (SE) tax. There may be a way to cut your tax bill by operating as an S corporation. SE tax is imposed on 92.35% of SE income at a 12.4% rate for Social Security up to $142,800 for 2021 and at a 2.9% rate for Medicare. An extra 0.9% Medicare tax is imposed on income exceeding $250,000 for married filers and $200,000 for singles. If you conduct business as an S corp, you’re subject to income tax, but not SE tax, on your share of business income. But the S corp must pay you a reasonable salary. Contact us if you want to discuss these issues.
Look at your employee handbook with fresh eyes
Many businesses have revised their policies and procedures during the COVID-19 pandemic. If yours has done so, be sure to accurately document the changes in your employee handbook. And while you’re at it, review the entire handbook with fresh eyes. Ask your attorney to assess its legal soundness and make all recommended changes. Use the handbook to express to workers how you’re supporting their well-being, thoroughly describing employee benefits, paid sick time and leave policies, and fringe benefits. Avoid using prefabricated templates or boilerplate language; revise the handbook so it’s truly your own. Our firm can help you develop cost-effective solutions to your employment challenges.
Working in the gig economy results in tax obligations
Before the pandemic hit, the number of people engaged in the “gig” or sharing economy was growing. And even more people turned to gig work during the pandemic to make up lost income. There are tax consequences for the people who perform these jobs. Generally, if you receive income from gigs or freelancing, it’s taxable. That’s true even if the income comes from a side job and if you don’t receive a 1099-NEC or other 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 rules. Contact us to learn more.
Help ensure the IRS doesn’t reclassify independent contractors as employees
Many businesses use independent contractors to help keep costs down. If you’re among them, make sure workers are properly classified for federal tax purposes. If the IRS reclassifies them as employees, it can be a costly error. It can be complex to determine whether a worker is an independent contractor or an employee for federal income and employment tax purposes. The IRS and courts have generally ruled that individuals are employees if the businesses they work for have the right to control and direct them in their jobs. Otherwise, they’re generally contractors. Contact us if you’d like to discuss how the rules apply to your business. We can help ensure your workers are properly classified.
The Restaurant Revitalization Fund is now live
The COVID-19 pandemic has affected various industries in very different ways. Widespread lockdowns and discouraged movement have led to increased profitability for some manufacturers and many big-box retailers. The restaurant industry, however, has had a much harder go of it — especially smaller, privately owned businesses in economically challenged areas. In response, the Small Business […]
Tax filing deadline is coming up: What to do if you need more time
This year, the deadline for filing 2020 individual tax returns is May 17, 2021. The April 15 due date was postponed due to the pandemic. If you still aren’t ready to file, request a tax-filing extension. Anyone can request an automatic extension with IRS Form 4868. This extends the filing deadline until Oct. 15, 2021. Be aware that a filing extension doesn’t grant you an extension of time to pay your taxes. You need to estimate and pay any taxes owed by the deadline to help avoid possible penalties. In some special situations, people can receive more time without filing Form 4868. This includes victims of certain disaster victims, military members in a combat zone and U.S. citizens abroad.
Providing education assistance to employees? Follow these rules
Many businesses provide education fringe benefits so their employees can improve their skills and gain knowledge. An employee can receive, on a tax-free basis, up to $5,250 each year from an employer for education under a “qualified educational assistance program.” For this purpose, education means any instruction or training that improves or develops an individual’s capabilities. It doesn’t matter if it’s job-related or part of a degree program. Different rules apply if the education is job-related. In addition to education assistance, some employers offer student loan repayment assistance. Contact us to learn more about setting up an education assistance or student loan repayment plan.
Maximizing Leads and Conversions: Getting the Right Blend
The convergence of leasing, living and marketing with data analytics is changing multifamily marketing. So much that digital marketing is on the verge of a new frontier where property managers and operators can dial into precisely what kind of message they want to send. “In the past, you could pick up a magazine, flip through the pages, […]
Where to Invest in Real Estate Right Now, and Where Not to, Say 2 CIOs
Data centers and infrastructure are promising. Offices aren’t, but the situation there may not be as dire as many fear. Maybe urban centers won’t go down the chute, after all. Some retail will be OK. Forget about farmland. These are among the insightful observations from CIO’s latest episode in our “2021 Asset Allocator Series.” With institutional investors looking […]
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