Sometimes attorneys will charge clients contingent fees based on the outcome of a case, rather than billing a flat or hourly fee for services rendered. However, the federal income tax treatment of contingent fees paid to an attorney out of a taxable nonbusiness judgment or settlement has historically been a source of confusion and litigation between taxpayers and the IRS. (more…)
After months of negotiations, Congress finally passed the long-awaited Setting Every Community Up for Retirement Enhancement 2.0 Act (SECURE 2.0). This part of the omnibus funding package builds on the SECURE Act of 2019 and contains major changes in the required minimum distribution (RMD) rules and other retirement provisions. Here are five major taxpayer friendly changes that will kick in over the next few years. (more…)
We are pleased to announce the promotion of Wendy Kurz to Principal with the firm.
“I am pleased to introduce Wendy Kurz as a principal with the firm,” said Connie Hammell, Managing Principal of KWC. “She is a responsive business partner to her many clients, bringing years of tax experience. I am confident she will contribute in every aspect to the firm’s future.”
Wendy is a Principal in KWC’s Business Services Group. She has more than 20 years of experience providing tax planning & preparation and business consulting services. She is accomplished in many industries including professional services, real estate, and construction.
Wendy’s primary focus is working with privately held businesses, many with multi-state operations, as well as high net worth individuals.
Wendy is a graduate of Florida State University. Outside of KWC, Wendy enjoys spending time with her family and traveling to any beach location possible.
Does your not-for-profit provide transportation fringe benefits to staffers? In 2017, the Tax Cuts and Jobs Act (TCJA) repealed a tax law that would have imposed unrelated business income tax (UBIT) on organizations that provide such benefits. However, though transportation benefits remain exempt from tax for participating employees, nonprofits can no longer deduct the costs.
Let’s take a closer look at the available transportation benefits and changes to tax law in this area. (more…)
Is your business ready to tackle the challenges and opportunities that lie ahead in 2023? Financial statements show how a company has performed in the past. But historical data doesn’t necessarily predict future performance, especially in an uncertain, volatile market. As part of your planning, it’s important for management to prepare forecasted statements. (more…)
Debtors typically experience a feeling of relief when a creditor agrees to forgive their debt. But that feeling often is replaced by shock and confusion when they learn they owe taxes on so-called “cancellation of debt” (COD) income. Read on to learn the tax rules for COD income and how they might affect your tax situation. (more…)
|Social Security/ Medicare||2023||2022
|Social Security Tax Wage Base||$160,200
|Medicare Tax Wage Base||No limit
|Employee portion of Social Security||6.2%||6.2%|
|Employee portion of Medicare||1.45%||1.45%|
|Individual Retirement Accounts||2023||2022|
|Roth IRA Individual, up to 100% of earned income||$6,500||$6,000|
|Traditional IRA Individual, up to 100% of earned Income||$6,500||$6,000|
|Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older||$1,000||$1,000|
|Qualified Plan Limits||2023||2022|
|Defined Contribution Plan limit on additions (Sections 415(c)(1)(A))||$66,000||$61,000|
|Defined Benefit Plan limit on benefits (Section 415(b)(1)(A))||$265,000||$245,000|
|Maximum compensation used to determine contributions||$330,000
|401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2))||$22,500||$20,500|
|401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older||$7,500||$6,500|
|SIMPLE deferrals (Section 408(p)(2)(A))||$15,500||$14,000|
|SIMPLE additional “catch-up” contributions for employees age 50 and older||$3,500||$3,000|
|Compensation defining highly compensated employee (Section 414(q)(1)(B))||$150,000||$135,000|
|Compensation defining key employee (officer) in a top-heavy plan
|Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c))||$750||$650|
|Business mileage, per mile||65.5 cents
||58.5 cents from Jan. 1 to June 30
62.5 cents from July 1 to Dec. 31
|Charitable mileage, per mile||14 cents (the rate is set by statute)
||14 cents (the rate is set by statute)
|Medical and eligible moving*, per mile||22 cents
||18 cents from Jan. 1 to June 30
22 cents from July 1 to Dec. 31
|Maximum Section 179 deduction||$1.16
|Phase out for Section 179||$2.89
|General deduction for eligible business-related food and beverage expenses||50%||100%**|
|Transportation Fringe Benefit Exclusion||2023||2022|
|Monthly commuter highway vehicle and transit pass||$300||$280|
|Monthly qualified parking||$300||$280|
|Married filing jointly||$27,700||$25,900|
|Single (and married filing separately)||$13,850||$12,950|
|Heads of Household||$20,800||$19,400|
|Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc.||$2,600||$2,400|
|Amount used to reduce the net unearned income reported on a child’s return that’s subject to the Kiddie Tax||$1,250||$1,150|
|Federal estate tax exemption||$12.92 million
|Maximum estate tax rate||40%||40%|
|Annual Gift Exclusion||2023||2022|
|Amount you can give each recipient||$17,000||$16,000|
* Only available for active-duty members of the military.
** Provided by restaurants. This is part of a law signed on December 27, 2020, which provided COVID-19 relief. The 100% deduction returned to 50% in 2023.
Payroll fraud is both an internal and external threat to companies. One of your employees, for example, could doctor time sheets to increase the number of hours worked — and thus inflate his or her paycheck. And a hacker halfway around the world could access your payroll records and steal personal information to commit identity theft. Both schemes attack the payroll function.
According to the Association of Certified Fraud Examiners, payroll fraud schemes cost a median loss of $65,300 per incident and usually last 30 months. Although some types of companies are more vulnerable to fraud, virtually every business that doesn’t protect its payroll records and processes incurs risk of financial losses. In addition to having strong internal controls, it helps to know common payroll schemes and take specific steps to address these threats. (more…)
Our annual tax planning and information letters below include tax-saving strategies for individuals and businesses.
If you have any questions or wish to discuss please feel free to contact us.