More than 100,000 small businesses have closed due to COVID-19. If yours is one of them, you should be aware that there is more to closing a business than laying off employees, selling office furniture, and closing the doors - you must also take certain actions as required by the IRS to fulfill your tax obligations. For example, if you have employees, you must file final employment tax returns as well as make final federal tax deposits of these taxes.
Generally, taxpayers must begin taking a required minimum distribution (RMD) from a defined-contribution retirement plan, including a 401(k) or 403(b) plan, or an IRA when they reach age 72 (70 1/2 if they reached 70 ½ before January 1, 2020). The RMD for any year is the account balance as of the end of the immediately preceding calendar year divided by a distribution period from the IRS's "Uniform Lifetime Table" and is the minimum amount you must withdraw from your account each year.
As a reminder, employers whose business has been financially impacted by COVID-19 can take advantage of the Employee Retention Credit, a refundable tax credit designed to encourage businesses to keep employees on their payroll. The credit is worth 50 percent of up to $10,000 in wages paid by an employer. Employers that are eligible for the credit for the first and second quarters of 2020, can apply for the credit when they file their second-quarter filing of Form 941, Employer's Quarterly Federal Tax Return which is due July 31.
Whether the goal is to gain experience or earn some spending money or help pay for college, summer is the prime job season for teens and college students. This year, however, with the coronavirus pandemic, the job situation has not been as easy - not to mention that it is starting later than usual. Nonetheless, if you are a high school or college student (or the parent of one) who has been lucky enough to find summer employment, here's what you should know about income earned during the summer months
The Tax Cuts and Jobs Act (TCJA) prohibits individual taxpayers from claiming miscellaneous itemized deductions for any taxable year beginning after December 31, 2017, and before January 1, 2026. However, proposed guidance has recently been issued clarifying that certain deductions of estates and non-grantor trusts are not miscellaneous itemized deductions and are allowable in figuring adjusted gross income, specifically:
Temporary changes to Section 125 cafeteria plans due to the coronavirus pandemic allow flexibility for taxpayers participating in cafeteria plans. These changes include extending the claims period for health flexible spending arrangements (FSAs) and dependent care assistance programs and allow taxpayers to make mid-year changes.
Topics: Personal Finance
When you sell a capital asset such as a home, household furnishings, and stocks and bonds held in a personal account, the difference between the amount you paid for the asset and its sales price is known as a capital gain or capital loss. Here are ten facts you should know about how gains and losses can affect your federal income tax return.
Cash is the lifeblood of any small business. Here are some tips to help your business maintain a sufficient cash flow to meet its financial goals and run efficiently:
Parents who adopted or started the adoption process during 2019 may qualify for the adoption credit. Generally, the credit is allowable whether the adoption is domestic or foreign. However, the timing rules for claiming the credit for qualified adoption expenses differ, depending on the type of adoption.
Taxpayers with net operating losses (NOLs) for a business are provided tax relief under the CARES Act. Tax relief for partnerships filing amended returns is provided as well. Let's take a look at three key points:
Topics: Business Ownership