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Tax Withholding for Seasonal and Part-Time Employees

Posted on May 4th, 2021

Many businesses hire part-time or full-time workers, especially in the summer. The IRS classifies these employees as seasonal workers, defined as an employee who performs labor or services on a seasonal basis (i.e., six months or less). Examples of this kind of work include retail workers employed exclusively during holiday seasons, sports events, or during the harvest or commercial fishing season. Part-time and seasonal employees are subject to the same tax withholding rules that apply to other employees. Read More…

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It’s Never Too Early to Check Tax Withholding

Posted on September 6th, 2020

While it probably seem like tax season just ended, it is never too early to do a “Paycheck Checkup” to make sure the right amount of tax is withheld from earnings – and avoid a tax surprise next year when filing your 2020 tax return. As a reminder, because income taxes operate as a pay-as-you-go system, taxpayers are required by law to pay most of their tax as income is received. Read More…

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Worker Classification: Employee vs. Contractor

Posted on March 3rd, 2020

If you hire someone for a long-term, full-time project or a series of projects that are likely to last for an extended period, you must pay special attention to the difference between independent contractors and employees. Read More…

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Employers: Backup Withholding Lowered to 24 Percent

Posted on June 5th, 2019

Small business owners are reminded that tax reform legislation lowered the backup withholding tax rate to 24 percent. In addition, the withholding rate that usually applies to bonuses and other supplemental wages was also lowered to 22 percent. Read More…

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Penalty Relief for Withholding, Estimated Tax Shortfalls

Posted on February 7th, 2019

The estimated tax penalty has been waived for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year; however, there is a catch: the penalty is only waived for taxpayers who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. Typically, a taxpayer must pay 90 percent to avoid a penalty. Read More…

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What Income is Taxable?

Posted on March 1st, 2018

Are you wondering if there’s a hard and fast rule about what income is taxable and what income is not taxable? The quick answer is that all income is taxable unless the law specifically excludes it. But as you might have guessed, there’s more to it than that.

Taxable income includes any money you receive, such as wages and tips, but it can also include non-cash income from property or services. For example, both parties in a barter exchange must include the fair market value of goods or services received as income on their tax return.

Nontaxable Income
Here are some types of income that are usually not taxable:

  • Gifts and inheritances
  • Child support payments
  • Welfare benefits
  • Damage awards for physical injury or sickness
  • Cash rebates from a dealer or manufacturer for an item you buy
  • Reimbursements for qualified adoption expenses

In addition, some types of income are not taxable except under certain conditions, including: Read More…

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Revised Form W-4: Check Your Withholding

Posted on March 1st, 2018

The Tax Cuts and Jobs Act made changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the child tax credit, limiting or discontinuing certain deductions and changing the tax rates and brackets. As such, a new version of Form W-4, Employee’s Withholding Allowance Certificate, was released on February 28.

Taxpayers with less complex tax situations–single, married couples with only one job, or those who have no dependents, and who have not claimed itemized deductions, adjustments to income or tax credits–might not need to make any changes to their withholding or revise their Forms W-4.

Taxpayers with more complicated financial situations, however, might need to revise their W-4. Among the groups who should check their withholding are: Read More…

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