2019 Q1 tax calendar: Key deadlines for businesses and other employers
Here are a few key tax-related deadlines for businesses during Q1 of 2019. JAN. 31: File 2018 Forms W-2 with the Social Security Administration and provide copies to employees. Also provide copies of 2018 Forms 1099-MISC to recipients and, if reporting nonemployee compensation in Box 7, file, too. FEB. 28: File 2018 Forms 1099-MISC if not required earlier and paper filing. MAR. 15: If a calendar-year partnership or S corp., file or extend your 2018 tax return. Contact us to learn more about filing requirements and ensure you’re meeting all applicable deadlines.
When holiday gifts and parties are deductible or taxable
It’s a great time of year for businesses to show their appreciation for employees and customers by giving them gifts or hosting holiday parties. Gifts to customers are generally deductible up to $25 per recipient per year. De minimis, noncash gifts to employees aren’t included in their taxable income yet are still deductible by you. Holiday parties are fully deductible provided they’re primarily for the benefit of non-highly-compensated employees and their families. If customers attend, parties may be partially deductible. Questions? Contact us.
Tax reform expands availability of cash accounting
The cash method of accounting offers greater tax-planning flexibility, allowing some businesses to defer taxable income. Under the TCJA, if your business’s average gross receipts for the previous three tax years are $25 million or less, you generally will now be eligible for the cash method for federal tax purposes, regardless of how your business is structured, your industry or whether you have inventories. Newly eligible businesses should determine whether the cash method would be advantageous and, if so, consider switching methods. Contact us to learn more.
It’s not too late: You can still set up a retirement plan for 2018
If most of your money is tied up in your business, retirement can be a challenge. So if you haven’t already set up a tax-advantaged retirement plan, consider doing so this year. There’s still time to set one up and make contributions that will be deductible on your 2018 tax return. And funds can grow tax deferred. If you have employees, they generally must be allowed to participate in the plan, provided they meet the requirements. But you might be eligible for a $500 tax credit for setting up the plan. Would you like to set up a plan this year? Contact us!
Buy business assets before year end to reduce your 2018 tax liability
Investing in business assets is a traditional and powerful year-end tax planning strategy, and it might make even more sense in 2018. Sec. 179 expensing and bonus depreciation both allow an immediate deduction for the cost of eligible asset purchases, rather than depreciating them over a number of years. The TCJA increases potential deductions under these breaks and expands the assets that are eligible. To qualify, you must place assets in service by the end of the year. So there’s still time to make purchases and reduce your 2018 taxes. Contact us to learn more.
Selling your business? Defer — and possibly reduce — tax with an installment sale
You’re ready to sell your business and want to get the return from it you’ve earned from the time and money you’ve invested. That means getting a good price and minimizing the tax hit on the proceeds. One option that can help defer tax is an installment sale. Spreading gain over several years is especially beneficial if it allows you to stay under the thresholds for triggering the 3.8% net investment income tax or the 20% long-term capital gains rate. But it’s not without tax risk. For help determining whether an installment sale is right for you, contact us.
Research credit available to some businesses for the first time
The TCJA didn’t change the research credit, but it has an impact on the credit. Previously, corporations subject to alternative minimum tax (AMT) couldn’t offset the research credit against AMT liability, which erased the credit’s current benefits. By eliminating corporate AMT, the TCJA removed this obstacle. Pass-through businesses can still claim the credit against AMT if their average gross receipts are $50 million or less. And qualifying start-ups without taxable income can still claim the credit against up to $250,000 in payroll taxes. Contact us for details.