Frequently Asked Questions
Federal and state laws can change every year and we want to ensure sure you have the latest information so you can make an informed decision.
What is changing for payroll calculations in 2020?
The Social Security wage limit increased from $132,900 to $137,700 for 2020. The rates are unchanged at 6.2% for employer contributions and 6.2% for employee contributions. Medicare rates are unchanged at 1.45% for both employer and employee contributions with no limit on taxable wages.
At this time, Circular E for use in 2020 has not been issued. Watch for that IRS Publication for federal withholding tables and rates.
For the first time since 2006, the State of Iowa is updating their withholding tables. Information can be found at https://tax.iowa.gov/idr-issues-new-income-withholding-tax-tables-2020.
How long do I need to keep copies of receipts and financial records?
The IRS recommendations for tax purposes can be found at https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records.
You should contact your attorney for other requirements that might relate to your particular industry or situation.
What is the mileage reimbursement rate for 2019?
The rate that can be paid or deducted for business use of a vehicle in 2019 is $.58/mile, which is up from $.545/mile in 2018. For employee expenses, this must be done under an accountable plan by the employer. Contact us for more information.
Other rates of interest for 2019 are $.20/mile for medical or moving purposes ($.18/mile for 2018) and $.14/mile for miles driven in service of charitable organizations (unchanged from 2018).
Are employers required to file W-2’s with the State of Iowa for 2018?
The following is from the Iowa Department of Revenue website:
- Businesses with 1 or more 1099s containing Iowa tax withholding are required to electronically file all 1099 Information Returns, with and without Iowa tax withholding, for tax year 2018 by January 31, 2019
- Businesses with 1 or more W-2s containing Iowa tax withholding are required to electronically file all W-2 Wage Statements, with and without Iowa tax withholding, for tax year 2018 by January 31, 2019.
- Businesses with 50 or more Iowa W-2s in tax year 2017 who received a filing extension for tax year 2017 must electronically file on or before January 31, 2019.
The State has a listing of software vendors that have been approved for filing with the State.
Please check the following link for that listing. Tax Year 2018 Approved Software Vendor List
I am hearing that I don’t need to keep track of deductions. Is that true?
In general, the same deductions apply. The new standard deduction makes the benefit from those deductions lower or nonexistent. The new standard deduction for a single taxpayer is now $12,200, $18,350 for a head of household, $24,400 for married filing jointly and $12,200 for married filing separately. The maximum amount that can be deducted for state and local income taxes, which includes all state income taxes, property taxes and personal property tax, is now capped at $10,000 per year. If this cap is reached, mortgage interest and contributions of $2,000 for a single taxpayer provide no benefit as you would use the standard deduction on the federal return. Amounts in excess of that amount help to reduce federal taxable income.
Keep in mind that Iowa did not follow federal law and the benefit will be different on the state taxation level. Iowa’s standard deduction is $2,080 for an individual and $5,120 for married filing a joint return or head of household.
What is the Section 179 limit for 2019?
Special first year depreciation under Section 179, for qualified property, is allowed up to $1,000,000.
In addition to Section 179, bonus depreciation of 100% of cost is allowed for qualified property.
Note that Iowa limits Section 179 to $100,000 and does not allow bonus depreciation as a deduction against state income tax.
Are meals and entertainment deductible under the new rules?
Most business meals continue to be 50% deductible but entertainment expenses are no longer deductible.
What is eSignature and how do you use it?
eSignature is a way for you to electronically sign your documents rather than physically signing them. You can learn more about the eSignature process at the link below.
In today’s world there are more and more cyber crimes and identity thefts than ever before. To help ensure that your personal information is protected we are now offering access to a secure online portal that you can safely share information through.
- Submit and obtain copies of your records and tax returns in a secure way.
- Be prepared by understanding latest tax law updates.
- Preview upcoming events offered.
- A secure and safe way to share documents.
In order to gain access to this valuable tool we simply need your email address.
Once we have received the email address you would like to use to access the portal you will receive an e-mail from the firm with a link to set up a Smart Vault account. Once you click on the link you will be prompted to set up a password for your account.
Once your account is set up you can access your records at any time by signing into the portal from our website. Once in the portal you will have the option to view information by tax year and also upload documents you would like to share with us.
Have a question? Ready to schedule an appointment to discuss how we can help you with one of our many financial and accounting services? Simply fill out the form with your contact information, and we'll be in touch with you shortly.