On August 8, 2020, the president issued an executive order to allow the deferral of certain payroll taxes during the last four months of 2020, and the IRS recently provided related guidance. This has implications for both employers and employees. Here’s a brief summary of the issues. Already-existing payroll tax deferral provisions There are generally two separate contributions to the Social Security payroll tax (technically, the Old-Age, Survivors, and Disability… Read More

In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provided a six-month automatic payment suspension on federal student loans through September 30, 2020. In August, the president signed a memorandum to extend federal student loan relief through December 31, 2020. What does this mean for student loan borrowers? All borrowers with federally held student loans will have their payments automatically suspended through 2020 without penalty. In… Read More

Due to the Coronavirus pandemic, many businesses have closed and millions of Americans received or are currently receiving unemployment compensation, many of them for the first time. It’s important for these individuals to know that unemployment compensation is taxable. People can have taxes withheld from this compensation now to help avoid owing taxes on this income when they file their income tax return next year. By law, these benefits are… Read More

You’ve grown tired of commuting to a job where you sit in a cubicle and do someone else’s bidding. You’ve got a better idea, you can build a better mousetrap, you know you have the knack for being in the right place at the right time, and so you’re thinking of self-employment. But how do you determine if this is a pipe dream or an idea worth pursuing? Can you… Read More

As working parents of young children know, paying for child care can take a big bite out of the family budget. The Federal government offers a number of tax breaks, including the Child and Dependent Care Credit, designed to ease the financial burdens of working families. The amount that can be claimed varies considerably, however, based on the outlays for care, the income of the parents, and the number of… Read More

What is generating tax-free income? Although income is usually taxable, there are a number of vehicles that can produce tax-free income. Examples of tax-free income can include: Roth IRA distributions Coverdell education savings account and 529 plan distributions Tax-exempt bond interest Interest on Series EE savings bonds used for education Life insurance (death benefit) Loans against and certain withdrawals from cash value insurance Certain gains from the sale of qualified… Read More

Working from home has its perks. Not only can you skip the commute, but you also might be eligible to deduct home office expenses on your tax return. Deductions for these expenses can save you a bundle, if you meet the tax law qualifications. Under the Tax Cuts and Jobs Act, employees can no longer claim the home office deduction. If, however, you run a business from your home or are otherwise self-employed and… Read More

Are you an employer who owns a business where tipping is customary for providing food and beverages? You may qualify for a tax credit involving the Social Security and Medicare (FICA) taxes that you pay on your employees’ tip income. How the credit works The FICA credit applies with respect to tips that your employees receive from customers in connection with the provision of food or beverages, regardless of whether… Read More

Employers can offer 401(k) plan participants the opportunity to make Roth 401(k) contributions. If you’re lucky enough to work for an employer who offers this option, Roth contributions could play an important role in maximizing your retirement income. What is a Roth 401(k)? A Roth 401(k) is simply a traditional 401(k) plan that accepts Roth 401(k) contributions. Roth 401(k) contributions are made on an after-tax basis, just like Roth IRA… Read More

What does the information on my paycheck statement mean? Whether you opt for a check or direct deposit, you should receive a paycheck statement each pay period. Many people ignore this information, but you should understand what it means and why it’s important. The following terms and acronyms commonly appear on pay stubs. If you know what the abbreviations stand for, you’ll have an easier time decoding your statement. Gross… Read More