IRS launches new Tax Withholding Estimator; Redesigned online tool makes it easier to do a paycheck checkup

WASHINGTON — The Internal Revenue Service today launched the new Tax Withholding Estimator, an expanded, mobile-friendly online tool designed to make it easier for everyone to have the right amount of tax withheld during the year.

The Tax Withholding Estimator replaces the Withholding Calculator, which offered workers a convenient online method for checking their withholding. The new Tax Withholding Estimator offers workers, as well as retirees, self-employed individuals and other taxpayers, a more user-friendly step-by-step tool for effectively tailoring the amount of income tax they have withheld from wages and pension payments.
“The new estimator takes a new approach and makes it easier for taxpayers to review their withholding,” said IRS Commissioner Chuck Rettig. “This is part of an ongoing effort by the IRS to improve quality services as we continue to pursue modernization and enhancements of our taxpayer relationships.”
The IRS took the feedback and concerns of taxpayers and tax professionals to develop the Tax Withholding Estimator, which offers a variety of new user-friendly features including:

• Plain language throughout the tool to improve comprehension.
• The ability to more effectively target at the time of filing either a tax due amount close to zero or a refund amount.
• A new progress tracker to help users see how much more information they need to input.
• The ability to move back and forth through the steps, correct previous entries and skip questions that don’t apply.
• Enhanced tips and links to help the user quickly determine if they qualify for various tax credits and deductions.
• Self-employment tax for a user who has self-employment income in addition to wages or pensions.
• Automatic calculation of the taxable portion of any Social Security benefits.
• A mobile-friendly design.

In addition, the new Tax Withholding Estimator makes it easier to enter wages and withholding for each job held by the taxpayer and their spouse, as well as separately entering pensions and other sources of income. At the end of the process, the tool makes specific withholding recommendations for each job and each spouse and clearly explains what the taxpayer should do next.

The new Tax Withholding Estimator will help anyone doing tax planning for the last few months of 2019. Like last year, the IRS urges everyone to do a Paycheck Checkup and review their withholding for 2019. This is especially important for anyone who faced an unexpected tax bill or a penalty when they filed this year. It’s also an important step for those who made withholding adjustments in 2018 or had a major life change.

Those most at risk of having too little tax withheld include those who itemized in the past but now take the increased standard deduction, as well as two-wage-earner households, employees with nonwage sources of income and those with complex tax situations.

To get started, check out the Tax Withholding Estimator on IRS.gov.
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Typical Situation: Our client’s Card processing fees have increase over the years. The may have outstanding invoices that would be paid quicker if they took credit cards.
 
When you hear a business owner say:
·         “I don’t understand the charges from my current credit card processing company.”
·         “It is taking too long for me to receive payment on my invoices.”
·         “I have been receiving chargebacks because I am not EMV compliant and my equipment does not take chip cards.”
·         “I want to upgrade my credit card processing equipment but I’m not sure what is the best fit.”
·         “I am opening a new business and I need to accept credit card payments.”
 
Merchant Services assist businesses with taking secure electronic payments (credit cards, checks, online payments). They find ways to streamline operations, reduce cost, improve cash flow, and provide excellent reporting. There are a variety of solutions including online payments, payment terminals, invoicing software, and POS systems.
 
How they Work They will ask questions about how a business operates currently and struggles they may be having with expenses, cash flow, reporting, marketing, customer loyalty, etc. They then take these findings to customize a tailored recommendation for the business. All new accounts are checked for accuracy, assisted with installation and training, and receive 24/7 support.

Matching Ideas with Resources:​

Step 1) Begin- Give us your accounting documents.

• Bank Statements, Receivables, Payables, Inventory, etc.

Step 2) Accounting–  We process your information, reconcile and file.

Step 3) Statements– We prepare the Financial Statements.

• Balance Sheets, Income Statements, Ledgers

Step 4) investigation– Accountant Review of Financials.

• Tax Planning- Proactive planning can potentially minimize your tax burden.

Step 5) Consulting-  Business Strategist Review.

• Analysis of Goals, Operations, Marketing, Trends,

Step 1) Begin Again- Meet With You and Discuss Findings.

• Regular Accountability through Timely, Accurate Financial Reporting

 

Congratulations, Now that you sold your business, there are reports you need to fill out for the IRS. 

Form 8594 is used to report the sale and purchase of a group of assets that constitute a business. Both the purchaser and seller must file Form 8594 with their own individual income tax return.
On Form 8594, the total selling price of the business is allocated to asset classes using the residual method.
Form 8594 provides the IRS with the following information:

• The purchaser's depreciable basis in the assets transferred, and
• How the seller determined gain or loss.

Assets Classes on Form 8594
Form 8594 lists seven classes of assets. For asset acquisitions occurring after March 15, 2001, make the allocation among the following assets in proportion to (but not more than) their fair market value on the purchase date in the following order:

Class I assets:

• Cash and general deposit accounts (including savings and checking accounts).
• Does not include certificates of deposits held in banks, savings and loan associations, or other depository institutions.

Class II assets:

• Certificates of deposit
• U.S. government securities
• Foreign currency
• Publicly traded personal property, including stocks and securities.

Class III assets:

• Accounts receivable
• Other debt instruments
• Assets that you mark to market at least annually for federal income tax purposes.

Class IV assets:

• Property of a kind that would properly be included in inventory if on hand at the end of the tax year or
• Property held by the taxpayer primarily for sale to customers in the ordinary course of business.

 
Class V assets:

• All other assets other than Class I, II, III, IV, VI, and VII assets.
• Example of assets included in this class:
• Furniture and fixtures, equipment, buildings, land, and vehicles.

Class VI assets:

• Section 197 intangibles (other than goodwill and going concern value).
• Examples include, workforce in place, customer lists, clients lists, patient lists, trademarks, trade names.
• See the list of section 197 intangibles.

Class VII:
Goodwill:

• Goodwill generally represents the excess of the price paid for a business over its net asset value (also called book value). It may have the following characteristics:
• It may be associated with a company's good reputation in terms of the products it sells, the services it performs, and it's standing in the community. Other characteristics of goodwill include:
• It may be tied to the ability of a business to continue doing business with its existing customers and to attract future customers.
• It is an intangible asset that may only be acquired as part of the acquisition of a business.
• It is a section 197 intangible whose value is amortized over 15 years by the purchaser of a business.
  

Going concern value:

• Going-concern value is the value attributed to a business entity as an on-going enterprise.
• Going-concern value focuses mainly on the ability of the company's assets to generate a return on investment not simply goodwill.

If an asset described in (I) through (VI) is included in more than one category, include it in the lower number category. For example, if an asset is described in both (4) and (6), include it in (4).

Thursday, July 18, 2019    10am- Noon

​If you're brand new to QuickBooks or a novice, then it is a perfect class for you. If you've been using QuickBooks for less than 2 years, you'll most certainly learn lots of interesting tips, tricks, and workarounds to help you be more effective. This class is perfectly suited for business owners, spouses of business owners, office receptionists, secretaries, office managers, sales and administrative professionals, bookkeepers and anyone who uses QuickBooks as part of their business.

You don't need any prior experience in QuickBooks or accounting. This is designed for people who are trying to decide if QuickBooks are for them and their business, people new to QuickBooks or have been using it for a short period of time. You don't need a computer as this class is not hands on. We've learned that people are able to learn so much more when they're focused on listening to the instructor.
​
The workshop will be held in the conference room in the Lower Level of our building:

300 N. Martingale Rd.,
Lower Level Room 80
Schaumburg, IL 60173
​
If you don't own a copy or subscription, no problem. Learn if it is right for your business and if it is, you can buy at half price though GLM.

As a follow up to a blog post here a couple of weeks ago (Click here):

Illinois Secure Choice will be sending notifications to employers, who have more than 25 employees eligible for unemployment for any 30 day period, in batches between now and the end of August/beginning of September.  All Illinois employers must either have their own retirement plan or the must register for Illinois Secure Choice by 11/1/19 if they have more than 25 employees.  If an employer has their own retirement plan they would need to prove that to Illinois Secure Choice to be exempted from the program.  If they start Illinois Secure Choice and later decide they’d rather have their own retirement plan, they would need to prove that the plan is in place to be allowed to withdraw from the program.
The notification letters to employers will include an access code to register online.  Once that registration is complete the clock starts on the program for that employer.  Employers have until November 1st to begin the program, so if they don’t want to start early they should delay registering until October. 
Any employee who is over 18 and is employed 30 days or more must be registered by their employer.  When employees are registered they are automatically opted in for a 5% contribution to the retirement plan and they have 30 days to change that before it goes into effect.  Employees will be sent information packets that include instructions on creating their online account as soon as they are registered.  Employers won’t get a copy so they can’t help employees other than to direct them to Illinois Secure Choice’s employee line 855-650-6914.
Employers will transmit payroll and contribution data with each payroll and the state will withdraw it from their bank account.  They will also need to regularly update the employee list with Illinois Secure Choice.

Thursday, July 18, 2019    10am- Noon

​If you're brand new to QuickBooks or a novice, then it is a perfect class for you. If you've been using QuickBooks for less than 2 years, you'll most certainly learn lots of interesting tips, tricks, and workarounds to help you be more effective. This class is perfectly suited for business owners, spouses of business owners, office receptionists, secretaries, office managers, sales and administrative professionals, bookkeepers and anyone who uses QuickBooks as part of their business.

You don't need any prior experience in QuickBooks or accounting. This is designed for people who are trying to decide if QuickBooks are for them and their business, people new to QuickBooks or have been using it for a short period of time. You don't need a computer as this class is not hands on. We've learned that people are able to learn so much more when they're focused on listening to the instructor.
​
The workshop will be held in the conference room in the Lower Level of our building:

300 N. Martingale Rd.,
Lower Level Room 80
Schaumburg, IL 60173
​
If you don't own a copy or subscription, no problem. Learn if it is right for your business and if it is, you can buy at half price though GLM.

Any business that has been in business for more than 2 years with 25 or more employees in Illinois will need to facilitate the Illinois Secure Choice program for its employees. Illinois is in the process of considering appropriate enforcement actions should such actions be needed to enforce the mandate. 

Unless –
An employer-sponsored retirement plan includes a plan qualified under Internal Revenue Code sections 401(a) (including a 401(k) plan), qualified annuity plan under section 403(a), tax-sheltered annuity plan under section 403(b), Simplified Employee Pension plan under section 408(k), a SIMPLE IRA plan under section 408(p) or governmental deferred compensation plan under section 457(b). It does not include payroll deduction IRAs.
 
Employers with fewer than 25 employees are exempt and do not need to participate in the Program.
“Employee” means any individual who is 18 years of age or older, is employed by an Employer, and who has Wages that are allocable to Illinois during a calendar year under the provisions of Section 304(a) (2)(B) of the Illinois Income Tax Act. An Employee includes both part-time and full-time employees.
“Employer” means a person or entity engaged in a business, industry, profession, trade, or other enterprise in Illinois, whether for profit or not for profit, that (i) has at no time during the previous calendar year employed fewer than 25 employees in Illinois, (ii) has been in business at least 2 y

• An employer employing 100 to 499 employees: 7/1/2019
• An employer employing 25 to 99 employees: 11/1/2019

 
Automatic enrollment means that following notification, employers will enroll eligible employees in Illinois Secure Choice unless employees have elected to opt out of the program. It is a Roth IRA and The default savings rate is 5% of gross pay
 
There are no employer fees, and employers are not required to contribute to the program.
 
There is an ongoing fee which is paid as a percent of your assets under management. This fee for each investment option is approximately 0.75% of assets per year ($0.75 for every $100 saved), and it pays for the administration of the program as well as the operating expenses charged by the underlying investment funds in which the program’s portfolios are invested. The fee is computed daily and netted from the assets in an investment option. Investment returns are credited to saver accounts ‘net of’ this cost.

The standard account option for savers will be a Roth IRA. The income limits for Roth IRA savers are set by the federal government. For 2019, the limits are $137,000 for a single tax filer and $203,000 for married taxpayers filing jointly. Beginning in 2019, Illinois Secure Choice will offer a traditional IRA account as an electable choice.