As this very unusual year comes to a close, we can look forward to the prospects and challenges waiting for us next year. Until then, there are many tax planning opportunities available to individuals and business entities that can be implemented before December 31, 2020.
Congress is currently working on another stimulus package with provisions that will provide assistance to business entities and no significant tax changes for individuals. It is uncertain if this legislation will be enacted before the end of the year. Watch our website for further details.
Please contact us to discuss any of the ideas discussed below. (more…)
With the end of 2020 approaching, it is time to prepare for what promises to be an unprecedented tax season. Here are some of the key issues that business owners, financial officers, and tax executives should consider now.
Note: This is by no means a complete list, and the tax consequences of some pandemic relief programs might change. (more…)
By Abe Livchitz, CPA, Senior Tax Manager
For many years San Jose required residential landlords with rentals within the city to pay an annual Business (License) Tax. A license was required if the landlord owned three or more residential rentals. In March, 2016 voters passed Measure G which “modernized” the city’s Business License rules effective July 1, 2017. The exception for property owners holding one or two residential rental properties was eliminated. As a result all taxpayer’s owning residential rental property within San Jose must register for and pay the $195 San Jose Business License Tax. Registration under measure G was required prior to September 30, 2017 but the City has extended the deadline until December 15th. The City will waive penalties and interest if property owners register and pay their Business License Tax prior to December 15th. Registration and payment can be made on-line at:
http://www.sanjoseca.gov/index.aspx?NID=5599
Measure G also increased the tax rates and maximum tax imposed on commercial landlords and mobile home park owners.
By Tony Dai, CPA, Senior Tax Manager
ASL Technology Group
The Social Security Administration announced that the maximum wages in 2018 subject to the 6.2% Social Security tax, or “FICA”, will rise from $127,200 to $128,700, an increase of just over 1%. The FUTA (Federal Unemployment Tax Act) taxable wages ($7,000) is expected to remain unchanged. It is important to calculate both FICA and FUTA taxes correctly when an employee has multiple employers during the year. (more…)
Beginning next year several tax filing due dates will be changing. The existing filing schedule has been in place since I manually prepared tax returns with pencil and paper before the computer age began so these changes are significant. The new filing dates were established under the Protecting Americans from Tax Hikes (PATH) Act of 2015 without much publicity outside of the tax practitioner community. The new filing dates are effective for tax years beginning January 1, 2016, so taxpayers unaware of the new dates may have an unexpected surprise next year.
Fortunately, the traditional April 15th due date for individual tax returns has not changed but the due dates of business returns have been modified. The changes were implemented to help smooth the tax filing process for taxpayers owning interests in pass-through entities such as partnerships and S-Corporations. (more…)
By Blake Larum, Senior Tax Manager
Senate Bill No. 483 was enacted into law on June 10, 2015. The tax is effective on July 1, 2015 for business entities with Nevada annual gross revenue in excess of $4 million. Gross revenue is defined as the total amount of revenue a business entity recognizes that contributes to the production of gross income exclusive of cost of goods sold and other expenses.
If a foreign contractor/vendor (payee) claims that payments are made for income that is effectively connected with a US trade or business, you are required to obtain from him a Form W-8ECI, Certificate of Foreign Person’s Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States, which effectively exempts him from tax withholding as he is to file his own US tax return. In this case, you are not responsible for withholding US tax from your payments to this foreign contractor/vendor. You need Form W-8ECI in order to…
Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, is requested from a foreign payee by a U.S. payer to:Establish the payee’s foreign status; Claim that such person is the beneficial owner of the income for which the form is being furnished, and; If applicable, claim a reduced rate of, or exemption from withholding under an income tax treaty. This form is used for the following types of payments:
Interest; Dividends; Rents; Royalties; Premiums; Annuities; Compensation for, or in expectation of, services performed (but not for independent personal services performed in the US – use Form 8233 instead); Other fixed or determinable annual or periodical gains (also referred to as FDAP). It is one of the most…
I have noticed that people use the term “service,” “product,” and “intangible” interchangeably in relation to software. For example, I was recently going through a client’s website to learn more about their technology and business, and I asked my husband (an engineer) to help me. He started explaining what they did with various acronyms like WLAN, CMOS, LTE-capable and so on, but it didn’t take long for me to get lost in his tech jargon. After seeing my blank face, he boiled it down to this: they sell a software product. But what does that really mean? What is licensing of software considered? And really, why does it matter?…