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Archives for Taxes

Weighing the risks

Weighing the risks vs. rewards of a mezzanine loan

To say that most small to midsize businesses have at least considered taking out a loan this year would probably be an understatement. The economic impact of the COVID-19 pandemic has lowered many companies’ revenue but may have also opened opportunities for others to expand or pivot into more profitable areas.

If your company needs working capital to grow, rather than simply survive, you might want to consider a mezzanine loan. These arrangements offer relatively quick access to substantial funding but with risks that you should fully understand before signing on the dotted line.

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Employee health care

Helping employees understand their health care accounts

Many businesses now offer, as part of their health care benefits, various types of accounts that reimburse employees for medical expenses on a tax-advantaged basis. These include health Flexible Spending Accounts (FSAs), Health Reimbursement Arrangement (HRAs) and Health Savings Account (HSAs, which are usually offered in conjunction with a high-deductible health plan).

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Social Security tax

Will You Have to Pay Tax on Your Social Security Benefits?

If you’re getting close to retirement, you may wonder: Are my Social Security benefits going to be taxed? And if so, how much will you have to pay? It depends on your other income. If you’re taxed, between 50% and 85% of your benefits could be taxed. (This doesn’t mean you pay 85% of your benefits back to the government in taxes. It merely that you’d include 85% of them in your income subject to your regular tax rates.)

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Education Tax Breaks

Back-to-school tax breaks on the books

Despite the COVID-19 pandemic, students are going back to school this fall, either remotely, in-person or under a hybrid schedule. In any event, parents may be eligible for certain tax breaks to help defray the cost of education.

Here is a summary of some of the tax breaks available for education.

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IRS Clarifies Payroll Tax Deferral Relief and Expands Relief for those Using the PPP

The CARES Act allows all employers to defer the deposit and payment of the employer’s share of social security (SS) taxes (6.2%) and self-employed individuals to defer payment of certain self-employment taxes.  The timing of the deferral will depend in whether or not the employer receives a loan under the Payroll Protection Program

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The Top 10 Questions about the Tax Deadline Extension

It was announced on March 20 that Tax Day would be postponed from April 15 to July 15 to coincide with the delayed tax payment deadline at the direction of President Trump. Treasury Secretary Steven Mnuchin announced the postponement via Twitter, stating that all taxpayers and businesses will have until July 15 to file and make payments without interest or penalties.

Many states are still announcing their response to the deadline. Due to COVID-19, Minnesota is providing additional time until July 15, 2020, for taxpayers to file and pay 2019 Minnesota Individual Income Tax without any penalty and interest.  Minnesota has not extended 2020 first and second quarter taxes. We know you have lots of questions. Below is a summary of the 10 most common questions and the IRS’s response.

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What You Need to Know About the Paid Sick and Family Leave Tax Credits

The Families First Coronavirus Response Act (FFCRA) signed on March 18, 2020, made unprecedented expansions to paid sick and family (childcare) leave provisions in light of the challenges for the American workforce due to COVID-19. The expansions to paid sick and family leave cover employers with up to 500 employees, and tax credits are available for up to 100% of qualifying wages paid. Eligible employers are granted a grace period by the DOL to come into compliance with the Act as long as employers act reasonably and in good faith during the grace period.

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Financial Relief for Families Tax Credit – What to Expect with Your Check

The distribution of economic impact payments is expected to begin in the next three weeks and be available throughout the rest of 2020. With so much news circulating, it can be difficult to keep tabs on the latest updates. We also recognize it can be challenging to separate the legitimate updates from speculation. Below we have put together a summary of what we know so far about the economic impact payments.

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CARES Act Overview: The Impact on Taxpayers and Businesses

The President signed the latest COVID-19 relief bill on March 27: The Coronavirus Aid, Relief, and Economic Security (CARES) Act. The bill brings with it several elements of relief for businesses, employees and families, in an effort to maintain livelihoods throughout the crisis and after. The expected cost of the bill is nearly $2 trillion and includes nearly $500 billion for in economic distress relief for businesses, states and municipalities.

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IRS’ Employer COVID-19-Related Credits

The IRS has announced that employers required to provide emergency paid sick leave and emergency paid family and medical leave under the Families First Coronavirus Response Act (the Act) can begin taking advantage of two new refundable payroll tax credits. Equivalent credits are available to self-employed individuals based on similar circumstances.

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