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Charitable Giving as part of your Tax Planning Strategy

With the holiday season upon us and the end of the year approaching, we pause to give thanks for our blessings and the people in our lives. It is also a time when charitable giving often comes to mind. The tax benefits associated with charitable giving could potentially enhance your ability to give and should be considered as part of your year-end tax planning. Tax deduction for charitable gifts If you itemize deductions on your federal income tax return, you can generally deduct your gifts to qualified charities. This may also help you potentially increase your gift. Assume you want to make a...

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Your Year-End Tech Check

Wrap up 2020 knowing that your network and hardware are secure and ready for the new year with SIMA Technology's Year-End Tech Check from Chief Technology Officer, Kelly Davis. Review your backup devices and services Commonly, the business backup solutions are as simple as having an external hard drive connected or saving documents elsewhere like a cloud backup. While this is suitable for retrieving single documents as needed, the real problem comes with bigger issues that include theft, natural disasters, or user error. Documents can be saved, but not software and business applications. And the biggest factor with a network failure is...

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1099-NEC: Who should receive them, why proper classification is essential, and how to remediate errors

Form 1099-NEC is due to vendors by Jan. 31 for payments made the preceding year to non-corporate independent contractors. The IRS requires form W-9 to be completed before any payment is made to a vendor. Businesses do NOT have to issue a 1099 to any vendor that indicates on the Form W-9 that they are a corporation unless the payments were to an attorney. Employee or Contractor?  To determine if an individual is an employee or an independent contractor, consider the IRS 3-Factor Test: The Behavioral Test:  Does the company control or have the right to control what the worker does and...

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Form 1099 must be filed and distributed by January 31 for all independent contractors earning $600+

If you pay an individual (who is not an employee) or partnership for “services” rendered and the amount paid for the year is $600 or more, you must file an information return, Form 1099-MISC, with the IRS and provide a copy to the individual. Form 1099s are required to be filed and distributed by January 31. There is a penalty for failure to file by the date or failure to provide the correct identification number. The IRS may charge a $100 penalty for each incorrect identification number. If you do not plan to enter your independent contractor(s) payments in your payroll system...

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This #GivingTuesday… Enjoy tax benefits while helping others

With the holiday season upon us and the end of the year approaching, we pause to give thanks for our blessings and the people in our lives. It is also a time when charitable giving often comes to mind. The tax benefits associated with charitable giving could potentially enhance your ability to give and should be considered as part of your year-end tax planning. Tax deduction for charitable gifts If you itemize deductions on your federal income tax return, you can generally deduct your gifts to qualified charities. This may also help you potentially increase your gift. Assume you are considering making a...

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1099-MISC: Who should receive them, why proper classification is essential, and how to remediate errors

Form 1099-MISC is due to vendors by Jan. 31 for payments made the preceding year to non-corporate independent contractors. The IRS requires form W-9 to be completed before any payment is made to a vendor. Businesses do NOT have to issue a 1099 to any vendor that indicates on the Form W-9 that they are a corporation unless the payments were to an attorney. Employee or Contractor?  To determine if an individual is an employee or an independent contractor, consider the IRS 3-Factor Test: The Behavioral Test:  Does the company control or have the right to control what the worker does and...

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Technology Outreach: Taking Employee Communication to the Next Level

The manner in which employers communicate policies, procedures and benefit plan details to employees has a tremendous impact on how well those programs and policies are understood, utilized and perceived by employees. Providing your employees with ample, accurate resources will help convey your messages effectively and protect you from liability. The Value of Technology-facilitated Communication Using an employee portal to facilitate employee communication can streamline the process of providing timely, accurate information to your employees. Providing Easy, Anytime Access The ease of access is a major benefit of an online portal—for both employees and HR. Once information has been posted to the site, employees can...

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The Catch-Up Payment Provision for Overtime Exempt Employees

The DOL final overtime rule became effective Jan. 1, 2020. Among other things, the final rule also allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10% of the salary level if these payments are made at least on an annual basis. To enable compliance with the nondiscretionary bonus option, the final rule allows employers to make a “catch-up” payment at the end of each 52-week period.  A full discussion can be found here....

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IRS Releases 2021 Retirement Contribution Limits

Many Employee Contribution Limits Remain Unchanged The IRS has announced the cost-of-living adjustments for 2021 that affect amounts employees can contribute to 401(k) plans and IRAs. The following amounts remain unchanged for 2021: The employee contribution limit for 401(k) plans will remain $19,500. The catch-up contribution limit for employees aged 50 and over also remains unchanged at $6,500. The employee contribution limit for IRAs will remain $6,000. The catch-up contribution limit for employees aged 50 and over also remains unchanged, at $1,000. The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans will remain $13,500. Click here for more information. ...

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