With the open tax season nearly two weeks old, the Internal Revenue Service is beginning to expand the returns they are accepting, including those of taxpayers claiming education credits on Form 8863 starting this Thursday, Feb. 14.
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Posts By: Zinner & Co.
IRS Initiates 5500EZ Penalty Relief Program
The Internal Revenue Service has introduced a temporary one-year pilot program that will potentially enable certain small businesses with retirement plans to avoid penalties for not filing a Form 5500-EZ, and certain Forms 5500.
read more…Taxable versus Tax-exempt Investments
For some high-income taxpayers, their tax liability due to the IRS was unusually high this past tax season, and not for the most obvious reason–the 2013 increase in the top income tax rates.
read more…Employer Obligations for the Additional Medicare Tax
The IRS has issued final regulations relating to the Additional Medicare Tax on income above threshold amounts, as added by the Affordable Care Act.
Employers are responsible for withholding and reporting the 0.9% Additional Medicare Tax, which became effective in 2013. If an employer fails to withhold the correct amount from wages it pays to an employee, the employer may be liable for the amount not withheld and subject to applicable penalties.
In general, employees and their employers must each pay a Medicare tax, at a rate of 1.45%, on the entire amount of the employees’ wages. Effective for employees beginning in 2013, the 0.9% Additional Medicare Tax is imposed on individuals for wages in excess of $250,000 for married taxpayers filing jointly, $125,000 for married taxpayers filing separately and $200,000 for single taxpayers. Thus, for high-wage earners, the employer portion of the Medicare tax remains at 1.45%, but the employee portion can be a total of 2.35% of wages in excess of the threshold amounts.
To comply with the Additional Medicare Tax requirement, employers must withhold the 0.9% Additional Medicare Tax from wages it pays to an employee in excess of $200,000 in a calendar year, without regard to the employee’s filing status, wages paid by another employer or income from self-employment. Thus, generally the employer need not obtain additional information from the employee regarding the employee’s expected actual liability to withhold amounts due under the Additional Medicare Tax.
Employers are responsible for withholding and reporting the 0.9% Additional Medicare Tax, which became effective in 2013. If an employer fails to withhold the correct amount from wages it pays to an employee, the employer may be liable for the amount not withheld and subject to applicable penalties.
In general, employees and their employers must each pay a Medicare tax, at a rate of 1.45%, on the entire amount of the employees’ wages. Effective for employees beginning in 2013, the 0.9% Additional Medicare Tax is imposed on individuals for wages in excess of $250,000 for married taxpayers filing jointly, $125,000 for married taxpayers filing separately and $200,000 for single taxpayers. Thus, for high-wage earners, the employer portion of the Medicare tax remains at 1.45%, but the employee portion can be a total of 2.35% of wages in excess of the threshold amounts.
To comply with the Additional Medicare Tax requirement, employers must withhold the 0.9% Additional Medicare Tax from wages it pays to an employee in excess of $200,000 in a calendar year, without regard to the employee’s filing status, wages paid by another employer or income from self-employment. Thus, generally the employer need not obtain additional information from the employee regarding the employee’s expected actual liability to withhold amounts due under the Additional Medicare Tax.
When Does Once a Year Really Mean Once a Year?
One of the more confusing areas of tax law is the area of retirement planning and Individual Retirement Accounts (IRAs). In fact, there are so many nuances to IRAs, we’ve recently learned that the IRS can’t always get it right either!
read more…Employee Affordable Care Act Penalty
Under the Affordable Care Act (ACA), employers with 50 or more full time equivalent employees are required to offer affordable health coverage options to those full time employees and their dependents. Failure to comply will result in hefty penalties.
read more…The IRS to Prepare Tax Returns?
A recent article in The Plain Dealer addressed a contentious issue that has been circulating for years: with the steady rise of tax-evasion and identity theft, should the Internal Revenue Service be the one to prepare returns for taxpayers?
read more…IRS Crackdown on Employee Misclassification
The Internal Revenue Service is cracking down on employers who misclassify workers in a government effort to boost tax revenue.
read more…New Regulations for Longevity Income Annuities
The Treasury and the IRS have issued final rules on longevity income annuities (also known as a “deferred income annuity” or “longevity insurance”).
read more…IRS Issuing Form 1099-K Notices
The Internal Revenue Service is at it again.
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Since 1938, Zinner has counseled individuals and businesses from start-up to succession. At Zinner, we strive to ensure we understand your business and recognize threats that could impact your financial situation.
Distribution of $1.3 Billion in OBWC Rebates Set To Begin
Just over $1.3 billion in Ohio Bureau of Worker Compensation rebates will be mailed out in late October. The news comes as many businesses are struggling to recover from the coronavirus pandemic and the related shutdown issued by Ohio Gov. Mike DeWine earlier this...
Concern Over IRS Guidance on Presidential Order Deferring Payroll Tax
On Aug. 8, President Donald Trump issued a memorandum on deferring payroll tax obligations in light of the ongoing COVID-19 Disaster, which directed the Treasury Department to suspend collection of the employee portion of Social Security taxes from Sept. 1...
We Are Open For Business!
Over the past month, many of our clients and referral sources have asked if we have re-opened our office. The short answer is that is yes, we are open for business and available to meet with our clients. The longer answer to the question addresses many other issues...
Paycheck Protection Program Loan Forgiveness – But at what Cost?
Over the past few weeks, some of our local commercial lenders have slowly begun to open their online portals to allow those businesses who received Paycheck Protection Program (PPP) Loans to file their applications to obtain forgiveness of the debt related to...
Don’t Panic if You Received a Tax Notice from the IRS or State of Ohio
Over the past few weeks, we have received dozens of calls from clients, who have received tax notices from both the Internal Revenue Service and the State of Ohio. These notices indicate tax balances are due for the 2019 tax year, including additional penalty and...
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