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Business Mileage, Medical and Moving Rates Decrease

On Dec. 31. 2019, the Internal Revenue Service (IRS) issued the 2020 optional standard mileage rates, which are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. Beginning on January 1, 2020, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 57.5 cents per mile driven for business use (down from 58 cents in 2019); 17 cents per mile driven for medical or moving purposes (down from 20 cents in 2019); and 14 cents per mile driven in service of charitable organizations (unchanged). Click here...

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New Spending Package Includes Sweeping Retirement Plan Changes (SECURE Act)

The $1.4 trillion spending package enacted on December 20, 2019, included the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which had overwhelmingly passed the House of Representatives in the spring of 2019, but then subsequently stalled in the Senate. The SECURE Act represents the most sweeping set of changes to retirement legislation in more than a decade. While many of the provisions offer enhanced opportunities for individuals and small business owners, there is one notable drawback for investors with significant assets in traditional IRAs and retirement plans. These individuals will likely want to revisit their estate-planning strategies to prevent...

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2019 Tax Law Change Update

Highlights of spending package’s tax law changes The federal government spending package titled the Further Consolidated Appropriations Act, 2020, does more than just fund the government. It extends certain income tax provisions that had already expired or that were due to expire at the end of 2019. The agreement on the spending package also includes the Setting Every Community Up for Retirement Enhancement (SECURE) Act. Let’s look at some of the highlights. Extenders Here are some of the most widely relevant breaks that have been extended through 2020: The exclusion from gross income of discharge of qualified principal residence indebtedness, The treatment of...

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Have your employees visited the doctor this year?

Small life decisions can have a huge impact on your health. Those who don’t see a doctor once a year risk greater health complications down the road. Since most health plans cover an annual visit, there’s no reason to skip a checkup.  It's a great time to remind your employees to see their doctor before the year ends! [video width="1920" height="1080" mp4="https://simafinancialgroup.com/wp-content/uploads/2019/12/Have-You-Visited-Your-Doctor-This-Year.mp4"][/video]...

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Title: What are Corrective Distributions and How to Avoid Them Going Forward 

Tests – the word alone is enough to make the most studious of us sweat.  When placed in the context of 401(k) plans, i.e. determining whether your plan passes non-discrimination tests, anxiety levels can go through the roof!    This article will take a brief look at ways to correct a failed “ADP” test, the non-discrimination test mandated by the Internal Revenue Code to determine whether 401(k) elective deferrals unfairly favor highly-compensated employees and use corrective distributions, a method available to fix a failed test.  It also outlines a few changes that can be made mid-year to improve test results and explains...

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Market Watch – A Decade in Review

Ashley Vice, CFA, CFP ® By almost any economic or financial metric, the twenty-tens have been an amazing decade. This has been the first decade in American history without a recession. Our economy grew 40% while the population grew by less than 10%. (Said another way, GDP per capita soared). Unemployment hit generational lows. Earnings of mainstream equities more than doubled, closely in line with the rise in share prices. Meanwhile, the Consumer Price Index grew only 18% (as did the price of a postage stamp). The misery index (inflation + the unemployment rate) hit a 60-year low. Despite political turmoil,...

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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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Plan Ahead for Holiday Payrolls!

SIMA will be closed on Wednesday, December 25 and Wednesday, January 1 in observance of Christmas Day and New Year’s Day. Your payroll must be processed a day earlier than normal by 12:00 pm to ensure timely processing. Is your pay date on Wednesday, December 25 or Wednesday, January 1? There will be no direct deposits allowed on December 25 or January 1 due to holiday bank closures. If your pay date is on this day, please contact your payroll team at payroll@simafinancialgroup.com to let us know whether you would like to move your pay date to Tuesday or Thursday. Please don’t hesitate...

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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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