Axley & Rode, LLP

While you were celebrating the holidays, you may not have noticed that Congress passed a law with a grab bag of provisions that provide tax relief to businesses and employers. The “Further Consolidated Appropriations Act, 2020” was signed into law on December 20, 2019. It makes many changes to the tax code, including an extension (generally through 2020) of more than 30 provisions that were set to expire or already expired. Two other laws were passed as part of the law (The Taxpayer Certainty and Disaster Tax Relief Act of 2019 and the Setting Every Community Up for Retirement Enhancement Act). Here are five highlights. Long-term part-timers can participate in 401(k)s. Under current law, employers generally can exclude part-time employees (those who work less than 1,000 hours per year) when providing a 401(k) plan to their employees. A qualified retirement plan can generally delay participation in the plan based on an employee attaining a certain age or completing a certain number of y...

The S corporation business structure offers many advantages, including limited liability for owners and no double taxation (at least at the federal level). But not all businesses are eligible - and, with the new 21% flat income tax rate that now applies to C corporations, S corps may not be quite as attractive as they once were. Tax comparison The primary reason for electing S status is the combination of the limited liability of a corporation and the ability to pass corporate income, losses, deductions and credits through to shareholders. In other words, S corps generally avoid double taxation of corporate income — once at the corporate level and again when distributed to the shareholder. Instead, S corp tax items pass through to the shareholders’ personal returns and the shareholders pay tax at their individual income tax rates. But now that the C corp rate is only 21% and the top rate on qualified dividends remains at 20%, while the top individual rate is 37%, double taxation might ...

Truckers, don’t miss this deadline! The IRS reminds owners of most heavy highway vehicles that the window of time to file Form 2290 (“Heavy Highway Vehicle Use Tax Return”) and pay related taxes began on 7/1/18, and ends 8/31/18. The highway use tax applies to highway motor vehicles with taxable gross weight of at least 55,000 pounds. This usually includes large trucks, truck tractors and buses. The IRS encourages owners to take advantage of the speed and convenience of using e-filing to file and pay taxes due. Here are more details:  https://bit.ly/2mJ926a