Tax reform legislation enacted in December 2017 offers a new tax credit for employers who provide paid family and medical leave. Here are several facts about how this credit works and which employers are eligible to claim it:
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• The credit is available for wages paid in taxable years beginning after December 31, 2017, and before January 1, 2020.
• Some employers can claim the credit retroactively to the beginning of their first taxable year beginning after December 31, 2017, if they meet the terms of a transition rule on or before December 31, 2018.
• To be eligible for the credit, an employer must have a written policy in place that includes:
  • At least two weeks of paid family and medical leave annually to full-time employees, prorated for part-time employees.
  • Pay for family and medical leave that's at least 50 percent of the wages normally paid to the employee.
• Generally, for tax year 2018, the employee's 2017 compensation from the employer must be $72,000 or less.

The credit ranges from 12.5 percent to 25 percent of wages paid during an employee's leave.
For purposes of this credit, family and medical leave includes leave for one or more of the following reasons:

• Birth of an employee's child and to care for the child.
  Placement of a child with the employee for adoption or foster care.
• Care for the employee's spouse, child or parent who has a serious health condition.
• A serious health condition that makes the employee unable to do the functions of their position.
• Any qualifying need due to an employee's spouse, child or parent being on covered active duty in the Armed Forces. This includes notification of an impending call or order to covered active duty.
• To care for a service member who's the employee's spouse, child, parent or next of kin.

More information: 
https://www.irs.gov/newsroom/section-45s-employer-credit-for-paid-family-and-medical-leave-faqs

Please call us if you have questions or would like further information.​

Safekeeping tax records helps for future filing, amended returns, audits 
 
WASHINGTON — With the tax filing season quickly approaching, the Internal Revenue Service wants taxpayers to understand how long to keep tax returns and other documents.
 
This is the seventh in a series of reminders to help taxpayers Get Ready for the upcoming tax filing season. The IRS has recently updated its Get Ready Page https://www.irs.gov/individuals/steps-to-take-now-to-get-a-jump-on-next-years-taxes with steps to take now for the 2019 filing season.
 
The IRS generally recommends keeping copies of tax returns and supporting documents at least three years. Employment tax records should be kept at least four years after the date that the tax becomes due or paid, whichever is later. Tax records should be kept at least seven years if a return claims a loss from worthless securities or a bad debt deduction. Copies of previously-filed tax returns are helpful in preparing current-year tax returns and making computations if a return needs to be amended.
Safe-keeping records
Tax records should be kept safe and secure regardless of whether they are stored on paper or kept electronically. Paper records should be kept in a secure location, preferably under lock and key, such as a secure desk drawer or a safe. Records retained electronically should be backed up electronically and encrypted when possible. The IRS also suggests scanning paper tax and financial records into a format that can be encrypted and stored securely on a flash drive, CD or DVD with photos or videos of valuables.
 
Disposing of records
Tax records contain sensitive data such as Social Security numbers, income amounts and bank account information. Tax documents not properly disposed of can land in the hands of criminals and lead to identity theft. Once past their useful date, records should be disposed of properly. Paper tax returns and supporting documents should be shredded before being discarded. Old computers, back-up drives and media contain sensitive data. Deleting stored tax files will not completely erase them. Using special wiping software ensures the removal of sensitive data.
 
Taxpayers still keeping old tax returns and receipts stuffed in a shoe box may want to rethink their approach. When records are no longer needed the data should be properly destroyed.
​More information is available on IRS.gov at How long should I keep records?  
​https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records

​WASHINGTON – More families will be able to get more money under the newly-revised Child Tax Credit, according to the Internal Revenue Service.

This is the third in a series of reminders to help taxpayers get ready for the upcoming tax filing season. Additionally, the IRS has recently updated a special page on its website with steps to take now for the 2019 tax filing season.

The Tax Cuts and Jobs Act (TCJA), the tax reform legislation passed in December 2017, doubled the maximum Child Tax Credit, boosted income limits to be able to claim the credit, and revised the identification number requirement for 2018 and subsequent years. The new law also created a second smaller credit of up to $500 per dependent aimed at taxpayers supporting older children and other relatives who do not qualify for the Child Tax Credit.

“As we approach the 2019 tax-filing season, I want to remind taxpayers to take advantage of this valuable tax credit if they are eligible to claim it,” said IRS Commissioner Chuck Rettig. “Tax reform changed the tax code significantly and doubling the Child Tax Credit is an example of how the changes impact taxpayers.”

Here are some important things taxpayers need to know as they plan for the tax-filing season in early 2019: 

Child Tax Credit increased
Higher income limits mean more families are now eligible for the Child Tax Credit. The credit begins to phase out at $200,000 of modified adjusted gross income, or $400,000 for married couples filing jointly, which is up from the 2017 levels of $75,000 for single filers or $110,000 for married couples filing jointly.

Increased from $1,000 to $2,000 per qualifying child, the credit applies if the child is younger than 17 at the end of the tax year, the taxpayer claims the child as a dependent, and the child lives with the taxpayer for more than six months of the year. The qualifying child must also have a valid Social Security Number issued before the due date of the tax return, including extensions.
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Up to $1,400 of the credit can be refundable for each qualifying child. This means an eligible taxpayer may get a refund even if they don’t owe any tax.

For more information, see Publication 972, Child Tax Credit, available soon on IRS.gov.

New Credit for Other Dependents
A new tax credit – Credit for Other Dependents — is available for dependents for whom taxpayers cannot claim the Child Tax Credit. These dependents may include dependent children who are age 17 or older at the end of 2018 or parents or other qualifying relatives supported by the taxpayer.

During the upcoming tax-filing season, the IRS urges taxpayers to use the agency’s Interactive Tax Assistant to see if they qualify for either of these credits. To find out more, visit IRS.gov.

​Even though 2019 is just around the corner,
you still have time to take action and save on
your business tax bill.

​Here are 10 ideas to consider:


1.Buy equipment. Generally, you can claim an immediate Section 179 deduction (plus bonus depreciation for any remaining cost) for qualified property placed in service within generous limits in 2018 - no matter how late in the year this occurs.
 
2.Stock up on supplies. If you pay for incidental office supplies before year-end, the full cost is deductible in 2018, even if you don't use all the supplies this year.
 
3.Throw a holiday party. Despite recent tax law changes, your business can still deduct 100 percent of the cost of a holiday party for your entire team.
 
4.Fix up the premises. Under recent regulations, you can deduct the cost of minor repairs, but capital improvements must be written off over time.
 
5.Dole out bonuses. Bonuses paid to your employees before 2019 are deductible in 2018, but are also taxable to the employees this year.
 
6.Move up business trips. If you accelerate a long-distance business trip planned for next year, you can increase your 2018 travel expense deduction, including write-offs for reasonable lodging costs and round-trip airfare.
 
7.Try to collect debts. By making genuine collection efforts, you can secure a deduction in 2018 for bad debts that have become worthless.
 
8.Switch inventory accounting. If prices in your industry are escalating, you might switch from the "First in, First Out" (FIFO) method to "Last In, First Out" (LIFO) to reduce your taxable gain.
 
9.Send employees to school. Your business can deduct education provided to employees under a qualified plan. Up to $5,250 of benefits are tax-free to employees.
 
10.Get a head start. Finally, if you're getting a business off the ground, you may take a deduction of up to $5,000 of qualified startup costs.

Please call our office if you have questions about your year-end business tax plan.