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Understanding Gift Tax

Mon, Mar 25th 2019
 For tax purposes, gift givers, rather than gift recipients, have to account for and potentially pay the gift tax. But, you won't owe the gift tax until you have given away millions in cash or other assets during your lifetime. It sounds simple enough, but you still may have to file gift tax returns even though you don't owe any tax. The annual federal gift tax exclusion changes almost every year to adjust for inflation and it allows you to give a certain amount to as many people as you wish... Read More »

When Employees Cross State Lines

Mon, Mar 18th 2019
Do you have employees who live in one state and work in another? You may run into this if: Your company is located near a state border. You have employees who travel to job sites in other states. You have employees who work remotely. You are expanding into new states. Having some basic understanding of what happens will help you make the right decisions about classifying wages and avoiding penalties or amended filings later. Both state unemployment and withholding taxes should generally be paid... Read More »

Hobby vs. Business: What's the Difference to the IRS?

Mon, Mar 11th 2019
What's in a word? A world of tax consequences when the word is "business" or "hobby." In a nutshell: If you and the IRS determine that an activity is a business, you'll owe taxes on profits and will be allowed to deduct expenses for conducting that business. But if your passion for, say, making quilts is a "hobby," you cannot deduct the fabric, thread, needles and labor needed to make the bedclothes. Is your time-sapper really a business? Consider these criteria, and don't try to blur the... Read More »

What to Know About Pensions and Taxes

Mon, Mar 4th 2019
The amount of taxes you should withhold from your pension is dependent on your tax rate and your household sources of income and deductions. Basically, you add up all your sources of income and subtract your deductions to get your taxable income. Your taxable income determines your tax bracket, and you can use the tax bracket to estimate how much tax to withhold. It's clear that higher amounts of income are taxed at higher rates. The good news is that in retirement, it's likely you'll be in a... Read More »

Do You Have to File an Information Return?

Tue, Feb 26th 2019
If you engaged in certain financial transactions during the calendar year as a small business or self-employed (individual), you are most likely required to file an information return to the IRS. Below are some of the transactions that you have to report. Services performed by independent contractors — those not employed by your business. Prizes and awards, as well as certain other payments — termed other income. Rent. Royalties. Backup withholding or federal income tax withheld. Payments to... Read More »