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COVID-19 Response

COVID-19 Response

With recent news of the COVID-19 outbreak we here at Parks & Company wanted to let you know that we will remain open for business with added precautions to our sanitation routine.

We already have additional sanitation guidelines in place during the tax filing time of year due to the high volume of client traffic. We have put in place further measures to provide our clients with the most sanitary space possible. These measures include a large focus on wiping down doorknobs, faucets, and desks, especially in client waiting areas based on the CDC recommendations.

We ask that you please leave any unnecessary guests at home to reduce the exposure to other clients as well as our staff. If you feel sick in any way we ask that you please reschedule your appointment or have someone drop your tax documents off and we will call you with any additional questions or information we may need.

Thank you for your understanding during this hectic time. We hope everyone stays healthy during these next few weeks.

Best,

Parks & Company

W9 Forms for Subcontractors

W9 Forms for Subcontractors

Happy New Year everyone!

This is a message to business owners who plan to hire subcontractors for the new 2020 tax year. You as a business owner need to make sure that your subcontractors fill out a W9 form before having them complete any work in the 2020 year. A new W9 form should be filled out every year their is an information change for the subcontractor. Keeping a new W9 on file every year is important so you have up to date information on the subcontractor, such as their address. This information helps to file the required 1099 forms at the end of the tax year. In order to download or print out a W9 form please visit the IRS Website.

Withholding Income Tax on Social Security Benefits

Withholding Income Tax on Social Security Benefits

 

One of the topics that will need to be discussed when a person files a claim to begin collecting Social Security benefits is whether to have any federal income tax withheld. Depending on a person’s tax situation, they may need to have federal income tax withheld from their Social Security benefits in order to cover the amount of taxes they will owe in to the IRS at the end of the tax year.

Federal income tax withholding can be elected on the original claim form for Social Security benefits. The options on this form are percentages of 7%, 10%, 12%, or 22%, they do not accept flat dollar amounts for withholding on Social Security benefits. In order to change the amount of federal income tax withheld a form W-4V needs to be completed. Once the form is completed, it should be signed and returned to the local Social Security office by mail or in person. In order to decide the best withholding percentage for your personal tax situation, it is best to contact your accountant to assist you.

Final Overtime Rule

Final Overtime Rule

The Department of Labor has released its update to the federal overtime regulations that they are calling The Final Overtime Rule. These regulations govern which employees receive the minimum wage, and also which employees are able to receive overtime pay under federal wage law. This new set of regulations will be in effective as of January 1st, 2020, and are making some changes that may affect small business owners.

One of the biggest updates of this regulation is the increase of the standard salary level from $455 a week to $684 a week. This level is the minimum amount that must be paid to salaried employees annually in order for an exemption from overtime pay, as long as the employees fall under the executive, administrative, professional, or outside sales category.

In order to meet the standard salary level 90% of the income needs to be paid out on a regular salary basis. While the additional 10% can be paid out by bonus, commission, or incentive payment. For further details on this change in regulation, and to make sure you are compliant for the January start date, please visit the Department of Labor Website or speak with your accountant.

New Tax Developments

New Tax Developments

Recently, there have been some clarifications made by the IRS and court systems concerning tax law, a portion of these rulings deal with individual tax returns. A few examples of these rulings include:
– Taxation of “emotional distress” settlement payments, as they are not a physical injury or sickness
– Clarification on when Self Employed Health Insurance Premiums may be deducted
– Specification on the rules used to determine if an activity is not engaged in for profit (hobby) or is a for profit business
– Determination that medical marijuana dispensaries still may not deduct any of their expenses as they are engaging in the sale of illegal drugs under federal law, expenses also cannot be deducted by additional companies selling medical marijuana on the producers behalf

For more information on these developments please visit: The Tax Adviser.

Recent Social Security Scams

Recent Social Security Scams

 

Recently there has been an increase in scams targeting those who receive Social Security benefits. These scams come in the form of an email or telephone call stating that your Social Security information needs to be updated in order to receive the most benefits possible. The caller or email message will then ask you to respond with all of your personal information. If you receive one of these calls or emails that looks like it is from the Social Security Administration DO NOT RESPOND. Instead, you can call the SSA at 1-800-772-1213 to confirm the identity of the Social Security employee who reached out to you.

 

The image below is a scam email that was received by one of our employees here at Parks & Company. When you click the hyperlink in the email it takes you to a fake Social Security website and asks you to enter all of your personal information in order to update your account.

 

 

For more information about the Social Security scams that have been occurring, or contact information for the SSA to report a scam, please use this link: Social Security Administration Scams.

2019 Standard Mileage Rates

2019 Standard Mileage Rates

The new standard mileage rate for 2019 have just been announced as 58 cents per mile. This is an increase from the 2018 rate of 54.5 cents per mile. The standard mileage rate is used to calculate the amount of deductible costs for business use of an automobile including a car, van, pickup truck, or panel truck. This deduction is typically taken on a Schedule C for business owners, Schedule F for farmers, or Schedule A as miscellaneous itemized deductions, for employees.

Due to the changes implemented for the years 2018-2025 by the Tax Cuts and Jobs Act this rate can no longer be used to calculate business automobile expenses that are considered miscellaneous itemized deductions on a Schedule A.

There is a set rate of 14 cents per mile for use of an automobile in performing a service to charity. This deduction, if taken, should be included in the charitable deductions total on Schedule A.

Another change implemented by the Tax Cuts & Jobs Act that affects automobile deductions is the termination of moving expense deductions for individuals. For the years 2018-2025 this deduction is only applicable to active duty members of the armed forces that meet specified requirements, the rate for these expenses being 20 cents per mile.

For more information on the new standard mileage rates for 2019 please visit the IRS website.

Prepay Property Taxes and State/Local Income Taxes

Prepay Property Taxes and State/Local Income Taxes

With the passing of the new tax reform act, it makes sense to prepay 2018 property taxes as well as state and local income taxes by 12/31/17. This would allow the tax deduction to be taken on the 2017 tax return, as compared to the chance of not benefiting from the deduction on the 2018 return. The tax bill puts a $10,000 cap on the amount of property taxes and state and local income taxes that can be deducted on the return.

2017 Tax Cuts and Jobs Act

2017 Tax Cuts and Jobs Act

The Senate version of the 2017 Tax Cuts and Jobs Act appears to be very small business friendly. We support the passage of the bill as it is presented today.