It is, indeed, Small Business Week. And since many of you own your business, or run a business or profitable hobby on the side, I thought you might want to get some benefit from the IRS’ materials.
- Back-up withholding on wages and bonuses has dropped from 28% to 24%. This can be good windfall for some people. But please check to see how this affects your total tax liability – you might find yourself coming up short because of this.
- New criteria applies to people applying for an Employer ID Number (EIN). Only individuals with tax identification numbers – either a Social Security number (SSN) or an individual taxpayer identification number (ITIN) may apply for an EIN. It is no longer possible to use an existing business’ EIN to apply for a new one. There must be identifiable, responsible individuals behind the applications. This is designed to increase security and to avoid fraudulent filings.
- Exempt Organizations have until May 15 to file their annual reports. Form 8868 is available for a 6 month extension. Social Security numbers are not requested on the forms. Small organizations can use the “postcard” Form 990-EZ, file online. Neglecting to file for 3 years will cost the organization to lose its exempt status. That means no contributions are deductible by the donors. And all income is taxed at C corporation rates.
- Business owners are reminded to make quarterly estimated tax The next one is due on June 15th. Either as individuals, via Form 1040-ES, or as corporations – paying online.
- The IRS provides a nice summary of the current, new and improved depreciation benefits This includes bonus depreciation, Section 179, luxury vehicle depreciation, and real property. This resource will answer many of your questions.
- Last, but not least, the IRS highlights credits and deductions. They start with the Section 199A Qualified Small Business Income Deduction, and work their way down from there, to : Business losses, net operating losses, expenses and so forth.
Incidentally, the IRS has also scheduled two webinars for tax practitioners this month (no charge). You just might find the topics quite useful – if you can get access:
- Understanding Bankruptcy from an IRS Perspective – May 16, 2019 (1 CE)
- Qualified Business Income Deduction (199A) – May 30, 2019 (2 CE)
They have also built quite an extensive Small Business –Self-Employed information resource. It includes videos and articles. Consider visiting it.
And now it’s time for me to get back to work on this week’s EA classes. Tomorrow, we’re learning about Income and Deductions.
And remember, you can find answers to all kinds of questions about taxes and business issues, and EA Education, free. Where? Where else? At http://iTaxMama.com/AskQuestion