Archives for December 2016

PA Sales Tax Changes

December 28, 2016 by Frank

Timely Filing Vendor Discount
If you have noticed that your vendor discount has been capped at $25 or an amount lesser than previously received by your company, be sure to thank Governor Wolf. Effective for returns that have a period end date after August 1, 2016, the vendor discount for licensees for timely filed returns and payments is limited to the lesser of $25 or 1 percent of tax collected for a monthly filer, $75 or 1 percent of tax collected for a quarterly filer and $150 or 1 percent of tax collected for a semi-annual filer.

Sales tax base expansion
Effective August 1, 2016, licensees are now required to collect tax on [Read more…] about PA Sales Tax Changes

IRS Announces Standard Mileage Rates for Business, Charity, Medical and Moving

December 20, 2016 by Frank

The Internal Revenue Service has issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: [Read more…] about IRS Announces Standard Mileage Rates for Business, Charity, Medical and Moving

General Partner Liable for Partnership Taxes

December 13, 2016 by Frank

Employers are responsible for collecting (withholding) and remitting their employees’ payroll taxes, which includes the employee share of Social Security, Medicare and federal income taxes. Far too many employers who experience cash flow problems make the mistake of using these payroll taxes to fund their business operations. The thought process is “We are having a temporary cash flow problem, and next month we know that our customer, ABC Company, will pay off the balance due on their account. We’ll short pay our payroll taxes this month and make it up the following month when we receive that outstanding receivable.” However, what often happens is that next month comes and goes and the expected cash flows are not there. ABC Company failed to make the promised payment or another event occurred that impacted cash flows. The significant IRS penalty and interest assessments mount up, and that short-term cash flow problem becomes a very significant IRS problem that can actually cause the business to fail.

In these types of cases, the IRS has the right to collect the trust fund payroll taxes [Read more…] about General Partner Liable for Partnership Taxes

Tax Implications When Selling Capital Assets

December 6, 2016 by Frank

Generally, the IRS requires that a capital gain or loss be reported for tax reporting purposes when a capital asset is sold or exchanged.

Thus, it is important that you understand what a capital asset is. Nearly everything you own, whether for personal, business, or investment purposes, is a capital asset. Some examples are household furnishings, art work, stocks and bonds, coin and stamp collections, gems and jewelry, precious metals, vehicles and other machinery, personal residences, investment properties, and rental properties to name a few. Examples of assets that are not considered capital assets of business owners are inventory and accounts receivables.

Once you have disposed of a capital asset, you need to determine the gain or loss. A capital gain or loss is the difference [Read more…] about Tax Implications When Selling Capital Assets