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Tax Tips

Consider a Roth 401(k) Plan and Make Sure Employees Use It

Consider a Roth 401(k) Plan and Make Sure Employees Use It

Roth 401(k) accounts have been around for 13 years. A recent study by the Plan Sponsor Council of America (PSCA) found that Roth 401(k)s are now available at 70% of employer plans, up from 55.6% of plans in 2016. Despite the prevalence of employers offering Roth 401(k)s, most employees aren’t choosing to contribute to them. The PSCA found that only 20% of participants who have access to a Roth 401(k) made contributions to one in 2017. This may be because employees don’t understand them. If you offer a Roth 401(k) or you’re considering one, educate your employees about the accounts to boost...

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What Type of Expenses Can’t Be Written Off by Your Business?

What Type of Expenses Can’t Be Written Off by Your Business?

If you read the Internal Revenue Code (and you probably don’t want to!), you might be surprised to find most business deductions aren’t specifically listed. It doesn’t explicitly state that you can deduct office supplies and certain other expenses. Some expenses are detailed in the tax code, but the general rule is contained in the first sentence of Section 162, which states you can write off “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” Basic definitions In general, an expense is ordinary if it’s considered common or...

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Check on Your Refund — and Find Out Why the IRS Might Not Send It

Check on Your Refund — and Find Out Why the IRS Might Not Send It

Now is the time of year when many people who filed their tax returns in April are checking their mail or bank accounts to see if their refunds have landed. According to the IRS, most refunds are issued in less than 21 calendar days. However, it may take longer,and in rare cases, refunds might not come at all. Your refund status If you’re curious about when your refund will arrive, you can use the IRS “Where’s My Refund?” tool. Go to https://bit.ly/2cl5MZo and click “Check My Refund Status.” You’ll need your Social Security number, your filing status (single, married joint filer, etc.) and...

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Plug In Tax Savings for Electric Vehicles

Plug In Tax Savings for Electric Vehicles

While the number of plug-in electric vehicles (EVs) is still relatively small compared with gas cars on the road, it’s growing — especially in certain parts of the country. If you’re interested in purchasing an electric or hybrid vehicle, you may be eligible for a federal income tax credit of up to $7,500. (Depending on where you live, there may also be state tax breaks and other incentives.) However, the federal tax credit is subject to a complex phaseout rule that may reduce or eliminate the tax break based on how many sales are made by a given manufacturer. The vehicles of two...

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Employee vs. Independent Contractor: How Should You Handle Worker Classification?

Employee vs. Independent Contractor: How Should You Handle Worker Classification?

Many employers prefer to classify workers as independent contractors to lower their costs, even if it means having less control over the worker’s day-to-day activities. But the government is on the lookout for businesses that classify workers as independent contractors simply to reduce taxes or avoid their employee benefit obligations. Why it matters When your business classifies a worker as an employee, you generally must withhold federal income tax and the employee’s share of Social Security and Medicare taxes from his or her wages. Your business must then pay the employer’s share of these...

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Casualty Loss Deductions: You Can Claim One Only for a Federally Declared Disaster

Casualty Loss Deductions: You Can Claim One Only for a Federally Declared Disaster

It’s a fact of life that unforeseen disasters happen and they may cause damage to your home or your personal property. Before the Tax Cuts and Jobs Act (TCJA), eligible casualty loss victims could claim a deduction on their tax returns. But now there are new restrictions that make these deductions much more difficult to take. What’s considered a casualty for tax purposes? It’s a sudden, unexpected or unusual event, such as a hurricane, tornado, flood, earthquake, or fire; an accident or act of vandalism; or even a terrorist attack. Unfavorable change For losses incurred in 2018 through 2025,...

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