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payroll taxes

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https://player.captivate.fm/episode/68ee41eb-8f97-4779-ace0-d4d7a4be3ac3/ In March of 2020, Congress introduced a new tax credit: the Employee Retention Credit (ERC) as part of the CARES Act. The ERC was a direct response to the pandemic and was designed to help businesses keep employees on the payroll. But the ERC got off to a rocky start and was quickly overshadowed by its pandemic cousin, the Paycheck Protection Program (PPP). Nearly a year and a half later, the IRS is still issuing new guidance on the program, even as Congress is considering phasing it out. Business owners have dealt with a lot over the past year and a half — both the ERC and PPP are simple to claim and can offer relief retroactively. On today’s episode of the Taxgirl podcast, Kelly is joined by Dan Chodan to sort out all the intricacies of the ERC and PPP, and what they mean for taxpayers. Dan is…

On August 8, 2020, President Trump issued a directive to the Department of Treasury to allow for the deferral of payroll taxes for the period of September 1, 2020, through December 31, 2020. Details were scarce, but a few days later, Treasury Secretary Steven Mnuchin suggested to Fox Business’ Maria Bartiromo that the deferral would be voluntary. Today, the Department of Treasury and Internal Revenue Service (IRS) finally issued official guidance for taxpayers. For many, it raised more questions than answers. First, a little context and background. The President’s Order called for a deferral of the employee’s share of Social Security taxes for the time period beginning September 1, 2020, through December 31, 2020, for certain workers. Specifically, the deferral is restricted to “any employee the amount of whose wages or compensation, as applicable, payable during any bi-weekly pay period generally is less than $4,000, calculated on a pre-tax basis, or the equivalent…

(Updated to add the letter from the Chamber.) Last week, President Trump took Presidential action to act on payroll tax collections. Specifically, he ordered that the employee’s share of Social Security taxes be deferred beginning September 1, 2020, through December 31, 2020, for workers earning up to $104,000 per year. While it has been touted as a cut, the Executive Order only allows for deferral. That means – without further action – that the taxes have to be paid. The deferral is effective for the period of September 1, 2020, through December 31, 2020. You can find out more about the order here. Following the signing of the directive, tax professionals and taxpayers had questions about how the deferral might work. Today, Treasury Secretary Steven Mnuchin gave FOX Business’ Maria Bartiromo a first look into how that might work, and it appears that the deferral will be voluntary. Forbes AdvisorCalculate Your Payroll Tax Savings…

On August 6, 2020, the Senate adjourned without passing a stimulus package. Senate Majority Leader Mitch McConnell (R-KY) wasn’t involved in the talks, leaving Senate Minority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) to work directly with Treasury Secretary Steve Mnuchin and White House Chief of Staff Mark Meadows. As of Friday night, the sides reported that they had not reached an agreement. Today, apparently frustrated with Congress’ inaction, President Trump signed Executive Orders that would alter the current scheme. Among them? A payroll tax deferral. Specifically, the Order says: To that end, today I am directing the Secretary of the Treasury to use his authority to defer certain payroll tax obligations with respect to the American workers most in need. This modest, targeted action will put money directly in the pockets of American workers and generate additional incentives for work and employment, right when the money…

When I was younger, a family friend gave us a pile of old dresses. Hand-me-downs weren’t new to us, and my mom was an amazing seamstress who could make almost anything look terrific (she handmade both of my prom dresses and most of my church dresses). But I didn’t have my mom’s talent. I was, at best, good at shortening a hem or two, or removing a ruffle. But in my head, I was capable of Dior-level alterations. And when I saw a particular green and blue floral dress, I had visions, but no real plan, of modernizing it a la Andie Walsh (Pretty in Pink) into a head-turner. When I was done, I didn’t have the kind of dress that kids on dance floors would part to gawk at: I had an ill-fitting dress with odd cut-outs. Sometimes, your intentions aren’t good enough. Hacking away at something in an…

As COVID-19 continues to impact the United States, the federal government is taking action to ease the burden on taxpayers. Most recently, Congress passed a massive stimulus package that was signed into law by the President. The stimulus bill (also called the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act) has several moving pieces for taxpayers, including those stimulus checks for taxpayers. But the law also offers some provisions intended to combat rising unemployment: 6.6 million Americans filed for unemployment benefits last week. One of those provisions is the Employee Retention Credit or ERC. It’s found in the CARES Act in Section 2301. The ERC is designed to help businesses keep employees on payroll. The credit is available to employers, no matter the size of the business. Unlike some of the other relief, there is no cap on the number of employees. The average number of employees in 2019 will, however, affect how the credit…

Stocks are expected to rally today after a historic drop on Monday. Concerns over the price of oil (thanks to a price war between Russia and Saudi Arabia) and how the coronavirus will further affect the global economy sent shares tumbling by 2,013 points: the most significant point drop since Dow began recording stock averages in 1884. The steep drop stoked fears about the future of the U.S. economy. In response, President Donald Trump announced on March 9, 2020, that he would be meeting with Congressional Republicans on Tuesday to discuss proposed solutions. Included in that discussion? Tax relief, including payroll tax cuts. Trump said, “We’re going to be meeting with House Republicans — Mitch McConnell, everybody — and discussing a possible payroll tax cut or relief, substantial relief — very substantial relief. That’s a big — that’s a big number.” The last payroll tax cut for American workers was pushed through…

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