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Business charitable contribution rules have changed under the CARES Act

In light of the novel coronavirus (COVID-19) pandemic, many businesses are interested in donating to charity. In order to incentivize charitable giving, the Coronavirus Aid, Relief and Economic Security (CARES) Act made some liberalizations to the rules governing charitable deductions. Here are two changes that affect businesses: The limit on charitable deductions for corporations has increased. Before the CARES Act, the total charitable deduction that a corporation could generally claim for the year couldn’t exceed 10% of corporate taxable income (as determined with several modifications for these purposes). Contributions in excess of the 10% limit are carried forward and may... Read More

How the Secure Act is Changing Retirement

ON DECEMBER 20, 2019, THE SETTING EVERY COMMUNITY UPFOR RETIREMENT ENHANCEMENT (SECURE) ACT WAS SIGNEDINTO LAW. The SECURE Act represents some of the mostsignificant changes to retirement plan law since the passage ofthe Pension Protection Act of 2006, over thirteen years ago. Theprovisions of the Act are broad ranging and span many differenteffective dates.FINANCIAL HELP FOR PLAN SPONSORSThough tax credits have been in place to help offset the cost ofadopting a new retirement plan, the SECURE Act significantlyexpands the tax credit for employers. Prior to the SECURE Act,employers were allowed a tax credit of the lesser of 50% ofexpenses or... Read More

IRA account value down? It might be a good time for a Roth conversion

The coronavirus (COVID-19) pandemic has caused the value of some retirement accounts to decrease because of the stock market downturn. But if you have a traditional IRA, this downturn may provide a valuable opportunity: It may allow you to convert your traditional IRA to a Roth IRA at a lower tax cost. The key differences Here’s what makes a traditional IRA different from a Roth IRA: Traditional IRA. Contributions to a traditional IRA may be deductible, depending on your modified adjusted gross income (MAGI) and whether you (or your spouse) participate in a qualified retirement plan, such as a 401(k).... Read More

Hiring independent contractors? Make sure they’re properly classified

As a result of the coronavirus (COVID-19) crisis, your business may be using independent contractors to keep costs low. But you should be careful that these workers are properly classified for federal tax purposes. If the IRS reclassifies them as employees, it can be an expensive mistake. The question of whether a worker is an independent contractor or an employee for federal income and employment tax purposes is a complex one. If a worker is an employee, your company must withhold federal income and payroll taxes, pay the employer’s share of FICA taxes on the wages, plus FUTA tax. Often,... Read More

IRA account value down? It might be a good time for a Roth conversion

The coronavirus (COVID-19) pandemic has caused the value of some retirement accounts to decrease because of the stock market downturn. But if you have a traditional IRA, this downturn may provide a valuable opportunity: It may allow you to convert your traditional IRA to a Roth IRA at a lower tax cost. The key differences Here’s what makes a traditional IRA different from a Roth IRA: Traditional IRA. Contributions to a traditional IRA may be deductible, depending on your modified adjusted gross income (MAGI) and whether you (or your spouse) participate in a qualified retirement plan, such as a 401(k).... Read More

CARES Act Signed into Law On March 27, 2020, Congress passed the $2 trillion stimulus package known as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). President Trump signed the Act into law shortly thereafter. The CARES Act is very broad and contains provisions for Small Business Administration loans, assistance to distressed sectors, health care provisions, and various tax provisions impacting businesses and individuals. Highlighted below are some of the salient tax provisions included in the CARES Act. Business Tax Provisions Employee Retention Tax Credit for Employers Subject to Closure due to COVID-19: §The Act provides a refundable... Read More
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