2020 – 2021 Tax Planning Guide

Although you can’t avoid taxes, you can take steps to minimize them. This requires proactive tax planning – estimating your tax liability, looking for ways to reduce it and taking timely action. To help you identify strategies that might work for you, we’re pleased to present the 2020 – 2021 Tax Planning Guide.

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Are You Ready for the Switch to Form 1099-NEC?

The Internal Revenue Service (IRS) has resurrected a form that has not been used since the early 1980s, Form 1099-NEC (non-employee compensation). This form will be used to report non-employee compensation in place of Form 1099-MISC, which has been used since 1983 to report payments to contract workers and freelancers. Form 1099-MISC has also been used to report rents, royalties, crop insurance proceeds and several other types of income unrelated to independent contractors.

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Here’s Why the IRS Still Hasn’t Cashed Your Check

During the COVID-19 pandemic, the Internal Revenue Service (IRS) furloughed many of its employees or had them work from home to mitigate the spread of the virus. Many IRS offices remained shuttered for months, thus a backlog of millions of pieces of unopened mail, including IRS checks, accumulated in trailers set up outside IRS facilities.

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Foreign Account Reporting: What You Need to Know About the October 15 Deadline

All United States entities (including citizens and resident aliens as well as corporations, partnerships, and trusts) with financial interests in or authority over one or more foreign financial accounts (i.e. bank accounts and securities) need to report these relationships to the U.S. Treasury if the aggregate value of those accounts exceeds $10,000 at any time during the year. Failure to file the required forms can result in severe penalties.

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How States are Reshaping Nexus Laws for Remote Employees Due to COVID-19

As more and more organizations make the decision that their staff members can work from home either permanently or on a long-term basis, they may need to take a closer look at how nexus laws will be addressed — especially as several state governments are beginning to address work-from-home employees in terms of nexus and on tax revenue.

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What Are the Tax Plans of the Major Parties’ Presidential Candidates?

As the November 2020 elections approach, you might want to know what the two front-running presidential candidates’ tax plans for the future are. The following is an overview of their positions, as we know and understand them today. However, the political and economic landscapes can and will change, and there is no assurance these plans won’t be revised or that they will have eventual Congressional backing. However, the information may be helpful as you look toward future tax planning.

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Hiring Your Children in the Family Business Can Result in Big Tax Breaks

With jobs at a premium during the COVID-19 pandemic, you might consider hiring your children to help out in your business. Rather than helping to support your children with your after-tax dollars, you can instead hire them and pay them with tax-deductible dollars. Of course, the employment must be legitimate and the pay commensurate with the hours and the job worked.

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Guidance Issued on Deferral of Payroll Taxes

For the period between September 1 and December 31, 2020, employers can opt out of withholding the 6.2% payroll tax that is the employee’s share of Social Security taxes. The deferral is only available to employees that earn less than the equivalent of an annual salary of $104,000. If the employer chooses to defer collection, the taxes would then be due no later than April 30, 2021.

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