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IRS Releases 2020 Qualified Retirement Plan Amounts

Limit Type 2020 2019 Maximum Employee 401(K) or 403(b) Deferral $19,500 $19,000 Employee Catch-up Contributions $6,500 $6,000 Maximum Contribution to Defined Contribution Plan $57,000 $56,000 Maximum Benefit in a Defined Benefit Limit $230,000 $225,000 Annual Limit on Compensation $285,000 $280,000 Highly Compensated Employees $130,000 $125,000 Social Security Wage Base $137,700 $132,900 Annual IRA Contributions $6,000 …

The Internal Revenue Service recently issued the 2020 optional standard mileage rates to be used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. As of January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) are:: 57.5 cents …

The Internal Revenue Service (IRS) has released another preview of Form W-4 to the public. The new design aims to simplify the withholding system, replacing complicated worksheets with questions designed for the layman. The hope is that the form will help employees report more accurate amounts, allowing the IRS a better assessment of taxes paid. …

Final regulations from the Internal Revenue Service (IRS) give employers decision-making rights on whether to truncate their employees’ Social Security Numbers (SSN) on Form W2, Wage and Tax Statement. The rule, which began its journey in 2017 as a set of proposed regulations, is another step in the right direction toward protecting employees from identity …

Understanding your eligibility for tax credits is an essential facet of income tax planning. Unlike deductions, which reduce your tax owed as a percentage of the deduction multiplied by your marginal tax rate, tax credits reduce your tax owed on a dollar for dollar basis. Given the choice between a tax deduction and a tax …

Have you ever thought, I know we made more money than our statement shows, or I know we don’t owe that much in taxes; we never have any money! These moments of confusion are usually the result of either an assumption that your data is accurate, or a misunderstanding of how financial statements work. There …

The Taxpayer First Act

The Taxpayer First Act (the Act) of 2019 was signed into law on July 1, 2019. The bill, having gone through a few changes on its way to the president’s desk, passed with bipartisan support – a rare thing in Washington these days. The law aims to reform the Internal Revenue Service (IRS) by making …

The Tax Cuts and Jobs Act (TCJA) made many changes to the Internal Revenue Code. While many were widely discussed, businesses should know other provisions that may affect the taxable income computations on federal tax returns. Gross Receipts Test More small businesses will be eligible to use the overall cash method of accounting since the …

Ohio Income Tax Changes for 2019

There has been some recent legislation that significantly changes Ohio income tax laws for the 2019 tax year. We’ve summarized the changes that impact most individuals. All income tax rates have been reduced by 4%. The lowest three brackets are combined into one zero bracket. So taxpayers with taxable nonbusiness income of $21,750 or less …

Employers can minimize their compliance and audit risks by meeting the recordkeeping requirements of the Internal Revenue Code (IRC). The IRC requires all employers that withhold and pay federal income, Social Security and Medicare taxes to maintain certain records for each employee. Failing to meet these recordkeeping requirements can mean big penalties, not to mention …