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Showing posts from October, 2018

How to avoid getting hit with payroll tax penalties

For small businesses, managing payroll can be one of the most arduous tasks. Adding to the burden earlier this year was adjusting income tax withholding based on the new tables issued by the IRS. (Those tables account for changes under the Tax Cuts and Jobs Act.) But it’s crucial not only to withhold the appropriate taxes — including both income tax and employment taxes — but also to remit them on time to the federal government.

If you don’t, you, personally, could face harsh penalties. This is true even if your business is an entity that normally shields owners from personal liability, such as a corporation or limited liability company.

The 100% penalty

Employers must withhold federal income and employment taxes (such as Social Security) as well as applicable state and local taxes on wages paid to their employees. The federal taxes must then be remitted to the federal government according to a deposit schedule.

If a business makes payments late, there are escalating penalties. And if it…

Behavioral job interviews offer a glimpse of what could be

Once an employer identifies a prospect for an open position and sets up an interview, another great challenge arises: How do you effectively use the interview to determine whether this person is right for your organization?

One way is behavioral interviewing — a technique in which you frame your questions to candidates to elicit real-world stories from previous work experience. The answers your interviewees give can offer a glimpse of what could be.

Examples to consider

It’s important to structure your questions so that the candidate can’t reply with only a “yes” or “no” answer. In some cases, your “questions” might not literally be questions.

For example, if you’re looking for a customer service rep, you could say, “Tell me about a time you’ve had to handle a dissatisfied customer.” Look for detailed responses that appear honest and heartfelt.

Or let’s say the open position is for a manager or executive. You might ask something along the lines of, “Talk about a situation in which you wer…

Play your tax cards right with gambling wins and losses

If you gamble, be sure you understand the tax consequences. Both wins and losses can affect your income tax bill. And changes under the Tax Cuts and Jobs Act (TCJA) could also have an impact.

Wins and taxable income

You must report 100% of your gambling winnings as taxable income. The value of complimentary goodies (“comps”) provided by gambling establishments must also be included in taxable income as winnings.

Winnings are subject to your regular federal income tax rate. You might pay a lower rate on gambling winnings this year because of rate reductions under the TCJA.

Amounts you win may be reported to you on IRS Form W-2G (“Certain Gambling Winnings”). In some cases, federal income tax may be withheld, too. Anytime a Form W-2G is issued, the IRS gets a copy. So if you’ve received such a form, remember that the IRS will expect to see the winnings on your tax return.

Losses and tax deductions
You can write off gambling losses as a miscellaneous itemized deduction. While miscellaneous d…