An employer may pay an independent contractor and an employee for the same or similar work, but there are important differences between the two with potentially costly consequences. Read to find out more.
With the massive overhaul to the code in 2018, many filers are finding out that their tax situation has changed. The IRS has announced that it will waive the underpayment penalty for taxpayers who paid at least eighty-five percent of their total tax liability during calendar year 2018. This is a temporary change from the normal ninety percent of current year tax or one hundred percent of last year’s tax. The latter figure is increased to one hundred ten percent if your adjusted gross income exceeded $
When a participant in a 401(k) Plan terminates employment, there are typically a few options they have regarding what to do with their plan. Take a cash distribution – This is a taxable event (assuming all funds are pre-tax funds). The plan will automatically withhold 20% for federal taxes. It is important to note that there is also a 10% penalty for withdrawing 401(k) funds before age 59 1/2. Rollover the funds to an IRA or another Qualified Plan – This option is not a taxable transaction and t
The IRS has announced that it will be waiving the penalty for the underpayment of estimated tax for many taxpayers whose estimated tax payments and federal income tax withholdings came up short for the 2018 tax year. The underpayment penalty relief is intended to provide assistance to taxpayers that were unable to properly adjust withholding and estimated payments to reflect the numerous changes made to the income tax law under the Tax Cuts and Jobs Act (TCJA). Generally, the IRS will be waiving the underpa
The Tax Cuts and Jobs Act (TCJA) made significant changes to the federal tax law, including a significant decrease in the corporate tax rate. Beginning in 2018, the tax rate for c-corporations is a flat rate of 21%. This is great for existing corporations, as they were previously taxed at rates up to 38%. But what if your business is not currently classified as a c-corporation? Does it make sense to switch entity types to take advantage of the new, lower rate? The answer is it depends. Every business is dif