The California legislature recently passed landmark labor legislation that essentially makes it very difficult, if not impossible, for a worker to be classified as an independent contractor (self-employed). Governor Newsom was quick to sign it into law, and it generally became effective on January 1, 2020. Many believe this legislation will suppress entrepreneurship and innovation.
On December 20, 2019, President Trump signed into law the Appropriations Act of 2020, which included a number of tax law changes, including retroactively extending certain tax provisions that expired after 2017 or were about to expire, a number of retirement and IRA plan modifications, and other changes that will impact a large portion of U.S. taxpayers as a whole. This article is one of a series of articles dealing with those changes and how they may affect you.
This is a question many taxpayers ask during this time of year, and the question is far more complicated than people believe. To fully understand, we need to consider that there are times when individuals are REQUIRED to file a tax return, and then there are times when it is to the individuals’ BENEFIT to file a return even if they are not required to file.
The Internal Revenue Service (IRS) computes standard mileage rates for business, medical and moving each year, based on a number of factors, to determine the standard mileage rates for the following year.
On December 20, 2019, President Trump signed into law the Appropriations Act of 2020, which included a number of tax law changes, including extending certain tax provisions that expired after 2017 or were about to expire, a number of retirement and IRA plan modifications, and other changes that will impact a large portion of U.S. taxpayers as a whole. This article is one of a series of articles dealing with those changes and how they may affect you.
January 2 – Time to Call for Your Tax Appointment
January is the beginning of tax season. If you have not made an appointment to have your taxes prepared, we encourage you to do so before the calendar becomes too crowded.
January 10 – Report Tips to Employer
If you are an employee who works for tips and received more than $20 in tips during December, you are required to report them to your employer on IRS Form 4070 no later than January 10.
January 15 – Individual Estimated Tax Payment Due
It’s time to make your fourth quarter estimated tax installment payment for the 2019 tax year.
January 31 – Individuals Who Must Make Estimated Tax Payments
If you didn’t pay your last installment of estimated tax by January 15, you may choose (but aren’t required) to file your income tax return (Form 1040 or Form 1040-SR) for 2019 by January 31. Filing your return and paying any tax due by January 31 prevents any penalty for late payment of the last installment. If you can’t file and pay your tax by January 31, file and pay your tax by April 15.
January 2020 Business Due Dates
January 15 – Employer’s Monthly Deposit Due
If you are an employer and the monthly deposit rules apply, January 15 is the due date for you to make your deposit of Social Security, Medicare and withheld income tax for December 2019. This is also the due date for the nonpayroll withholding deposit for December 2019 if the monthly deposit rule applies. Employment tax deposits must be made electronically (no paper coupons), except employers with a deposit liability under $2,500 for a return period may remit payments quarterly or annually with the return.
January 15 – Farmers and Fishermen
Pay your estimated tax for 2019 using Form 1040-ES. You have until April 15 to file your 2019 income tax return (Form 1040 or Form 1040-SR). If you don’t pay your estimated tax by January 15, you must file your 2019 return and pay any tax due by March 2, 2020, to avoid an estimated tax penalty.
January 31 – 1099-MISCs Due to Service Providers & the IRS
If you are a business or rental property owner and paid $600 or more to individuals (other than employees) as nonemployee compensation during 2019, you are required to provide Form 1099 to those workers by January 31. “Nonemployee compensation” can mean payments for services performed for your business or rental by an individual who is not your employee, commissions, professional fees and materials, prizes and awards for services provided, fish purchases for cash, and payments for an oil and gas working interest. In order to avoid a penalty, copies of the 1099s also need to be sent to the IRS by January 31, 2020. The 1099s must be submitted on optically scannable (OCR) forms. This firm prepares 1099s in OCR format for submission to the IRS with the 1096 submittal form. This service provides both recipient and file copies for your records. A business or individual who is required to file 250 or more information returns (i.e., 1099s among others) must file those forms electronically. Please call this office for preparation assistance.
January 31 – Form 1098 and Other 1099s Due to Recipients
Form 1098 (Mortgage Interest Statement) and Forms 1099, other than 1099-MISC when box 7 is used, are also due to recipients by January 31. The IRS’ copy is not due until February 28, 2020, or April 1, 2020 if electronically filed. These 1099s may be reporting the following types of income:
- Dividends and other corporate distributions
- Amounts paid in real estate transactions
- Amounts paid in broker and barter exchange transactions
- Payments to attorneys
- Payments of Indian gaming profits to tribal members
- Profit-sharing distributions
- Retirement plan distributions
- Original issue discount
- Prizes and awards
- Medical and health care payments
- Debt cancellation (treated as payment to debtor)
January 31 – Employers – W-2s Due to All Employees & the Government
EMPLOYEE’S COPY: All employers need to give copies of the W-2 form for 2019 to their employees. If an employee agreed to receive their W-2 form electronically, post it on a website and notify the employee of the posting. GOVERNMENT’S COPY: W-2 Copy A and Transmittal Form W-3, whether filed electronically or by paper, are due January 31 to the Social Security Administration.
January 31 – File Form 941 and Deposit Any Undeposited Tax
File Form 941 for the fourth quarter of 2019. Deposit any undeposited Social Security, Medicare and withheld income tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return.
January 31 – File Form 943
All farm employers should file Form 943 to report Social Security, Medicare taxes and withheld income tax for 2019. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the year in full and on time, you have until February 10 to file the return.
January 31 – W-2G Due from Payers of Gambling Winnings
If you paid either reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of the W-2G form for 2019.
January 31 – File 2019 Return to Avoid Penalty for Not Making 4th Quarter Estimated Payment
If you file your prior year’s individual income tax return and pay any tax due by this date, you need not make the 4th Quarter Estimated Tax Payment that was otherwise due earlier in January.
January 31 – File Form 940 – Federal Unemployment Tax
File Form 940 (or 940-EZ) for 2019. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if
you deposited the tax for the year in full and on time, you have until February 10 to file the return.
January 31 – File Form 945
File Form 945 to report income tax withheld for 2019 on all non-payroll items, including back-up withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the year in full and on time, you have until February 10 to file the return.
Isler Northwest LLC is a firm of certified public accountants and business advisors based in Portland, Oregon. Our local, regional, and global resources, our expertise, and our emphasis on innovative solutions and continuity create value for our clients. Our service goals at Isler Northwest is to earn our clients trust as their primary business and financial advisors.
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Article Featured on TurboTax
The article below is up to date based on the latest tax laws. It is accurate for your 2019 taxes (filed in 2020).
It’s hard to believe that we are in the last quarter of the year! With 2019 coming to an end, now is a great time to make some easy and smart tax moves to help lower your tax bill and increase your tax refund when you file.
As much as the Internet has changed our lives for the good, it has also opened us up to threats from crooks from all over the world. They are smart and always coming up with a new trick to separate you from your hard-earned dollars or with an illegal way to use your stolen ID. They apply for loans and credit cards with stolen IDs, file fraudulent tax returns, make purchases with stolen credit card info, and tap into your bank account with stolen account information, and the list goes on. As a result, everyone needs to be very careful and mindful of the tricks used by these scammers to not end up becoming a victim.
Isler Northwest is proud to support Friends of the Children with a donation of toys and gifts this holiday season!
If your business engages the services of an individual (independent contractor), other than one who meets the definition of an employee, and you pay him or her $600 or more for the calendar year, then you are required to issue that person a Form 1099-MISC to avoid penalties and the prospect of losing the deduction for his or her labor and expenses in an audit. Payments to independent contractors are referred to as non-employee compensation (NEC).