Starting in tax year 2020, payers must complete Form 1099-NEC, Nonemployee Compensation to report any payment of $600 or more to a payee. There is a new form that only applies to business taxpayers who pay or receive nonemployee compensation.
Section 199A, enacted as part of the Tax Cuts and Jobs Act (TCJA), allows individual taxpayers and certain trusts and estates to deduct up to 20 percent of certain income (section 199A deduction). It is available to eligible taxpayers with qualified business income (QBI) from qualified trades or businesses operated as sole proprietorships or through partnerships, S corporations, trusts, or estates, as well as for qualified REIT dividends and income from publicly traded partnerships. The deduction is not available for C corporations.
Selecting your business successor is a fundamental objective when planning your exit strategy and requires a careful assessment of what you want from the sale of your business and who can best give it to you.
There are only four ways to leave your business and the more you understand about each one, the better the chance is that you will leave your business on your terms and under the conditions you want. With that in mind, here’s what you need to know about each option:
As such, it’s always a good idea to plan for what to do in case of a disaster. Here are some simple steps you can take right now to prepare:
Temporary administrative relief has been issued that helps certain retirement plan participants or beneficiaries who need to make participant elections by allowing flexibility for remote signatures. Generally, signatures of the individual making the election must be witnessed by a notary public or in the presence of a plan representative. This includes a spousal consent as well.
If you discover a mistake on your tax return after you’ve already filed, don’t panic. In most cases, all you have to do is file an amended tax return. Here’s what you need to know:
Taxpayers should use Form 1040X, Amended U.S. Individual Income Tax Return, to file an amended (corrected) tax return. An amended tax return should only be filed to correct errors or make changes to your original tax return. For example, you should amend your return if you need to change your filing status or correct your income, deductions, or credits.
While many schools are switching to hybrid or remote learning models, teachers and other educators should remember that they can still deduct certain unreimbursed expenses such as classroom supplies, training, and travel. Deducting these expenses helps reduce the amount of tax owed when filing a tax return.
To qualify for the deduction, the taxpayer must be a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide. They must also work at least 900 hours a school year in a school that provides elementary or secondary education as determined under state law.
Federal law requires most employers to withhold federal taxes from their employees’ wages. Whether you’re a small business owner who’s just starting or one who has been in business a while and is ready to hire an employee or two, here are five things you should know about withholding, reporting, and paying employment taxes.