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FICA Taxes

Federal Insurance Contribution Act (FICA) Taxes are United States federal payroll taxes levied to fund the Social Security and Medicare system. FICA Taxes burdens are divided between employers and employees and... more +
Federal Insurance Contribution Act (FICA) Taxes are United States federal payroll taxes levied to fund the Social Security and Medicare system. FICA Taxes burdens are divided between employers and employees and are currently set at 12.4% for Social Security and 2.9% for Medicare. less -

The New Section 199A 20% “Profit Deduction” for Pass-Through Businesses: The Undecided Issue of Owner Compensation

by McNair Law Firm, P.A. on

Under the Tax Cuts and Jobs Act, Congress is now offering a new 20% deduction for “pass-through” businesses – i.e. businesses that are not corporations. With the corporate tax rate being reduced under the new law to a flat...more

Income, from Whatever Exchange, Mine, or Fork Derived: The Basics of U.S. Cryptocurrency Taxation

In this first of (we hope) many posts on the interesting and myriad tax issues arising in the world of cryptocurrency and blockchain technology, we focus on the very basic U.S. federal income tax consequences of...more

Five Things Employers Should Know about Tax Reform

With the enactment of the Tax Cuts and Jobs Act comes sweeping changes to executive and equity compensation and employee benefits. Employers should evaluate whether they will be subject to the $1 million tax deductibility...more

How State Legislatures May Rock the World of Employee Compensation in Response to the Recent Federal Tax Law

Prior to the effective date of the tax bill recently signed by the President, Section 164 of the Internal Revenue Code permitted individuals who itemized deductions to deduct state and local income and other designated taxes...more

Major Changes in Taxation of Business Under Tax Cuts and Jobs Act: Is Pass-Through Right for You?

by Baker Donelson on

Effective for tax years beginning in 2018, the tax rates for C corporations will be reduced from 35 percent to 21 percent. The stated top rate for individuals, trusts and estates, including owners of pass-through businesses,...more

Year-End Employment Tax Reminder: Don’t Forget to Withhold FICA Taxes on Vested Deferred Compensation Benefits

Under federal tax law, non-qualified deferred compensation benefits are subject to a special timing rule that requires the employer to withhold Social Security and Medicare taxes (FICA taxes) when such benefits vest. While...more

Income, from Whatever Exchange, Mine, or Fork Derived: The Basics of U.S. Cryptocurrency Taxation

by Proskauer - Tax Talks on

In this first of (we hope) many posts on the interesting and myriad tax issues arising in the world of cryptocurrency and blockchain technology, we focus on the very basic U.S. federal income tax consequences of...more

Common U.S. Tax Withholding and Reporting Errors with Respect to Certain RSUs

by Dorsey & Whitney LLP on

A Canadian company (the employer) historically has not issued equity-based awards to employees of its U.S. subsidiaries, but it now is considering doing so. Past posts have addressed potential U.S. income tax pitfalls and the...more

IRS Challenges Ahead For Insurance Producers?

by Tonkon Torp LLP on

A 2017 Tax Court decision, Fleischer v. Commissioner, may call into question a tax planning strategy commonly used by commissioned brokers and salespersons in many industries. This Alert looks at the impact of the decision on...more

My Business Owes IRS Employment Taxes: What Do You Do? IRS Employment Taxes and “Trust fund Recovery Penalty” (Part 7)

by McNair Law Firm, P.A. on

Businesses that have employees and pay wages and salaries must withhold federal employee income taxes and the employee’s share of federal employment taxes (FICA) from these wages and salaries. The employer must “match” the...more

The FICA Tax Exemption For Non-Resident Aliens In The U.S. Under F, J, M, Or Q Visas

by Jackson Lewis P.C. on

A common issue for employers of non-resident aliens authorized to work in the U.S. is whether (and when) such individuals are exempt from FICA taxation. Under the Internal Revenue Code, a nonresident alien (“NRA”) in the...more

Developments in FICA and self-employment tax affect partners and S corporations

by Thompson Coburn LLP on

I was recently honored to serve as a guest columnist in the June 2017 “Shop Talk” column in WG&L’s Journal of Taxation. The article, “Developments in FICA and Self-Employment Tax Affect Partners and S Corporations,” tied...more

Tribal Tax Parity Legislation Gains Ground in Congress

by Holland & Knight LLP on

In the past month, members of Congress have introduced two important bills that promote parity for tribal governments and their tribal council members. The Tribal Social Security Fairness Act would allow tribal...more

IRS gets upper hand in S corporation compensation audits

by Thompson Coburn LLP on

Any compensation the owner receives is subject to FICA tax, which imposes an equivalent burden. And the IRS frequently attacks owners who receive cash distributions from an S corporation, arguing that the distributions were...more

Timing is Everything: IRS Raises the Stakes for Employers Who Delay FICA Taxation of Deferred Compensation

by Ward and Smith, P.A. on

Employers, both for-profit and tax-exempt organizations, often overlook the complex FICA tax rules applicable to deferred compensation. Unfortunately, this oversight now can be a real problem for the employer. When an...more

Using an S corporation to avoid self-employment tax

by Thompson Coburn LLP on

Our last post discussed self-employment (SE) tax and taxpayers’ efforts to avoid that tax when using an entity taxed as a partnership to conduct business. It concluded that a limited partnership that conducted business...more

Treating Partners as Employees – Overview and Update

by Ballard Spahr LLP on

Limited liability companies (LLCs) have become the fastest-growing entity choice for businesses in recent years. LLCs provide flexibility in operations and distributions. However, to the surprise of many businesspeople, if an...more

FICA Taxes and Administrative Traps for Employers

by Sullivan & Worcester on

The nuances of the Social Security and Medicare tax system – collectively FICA taxes – continue to confound and increase the potential liability of employers who are not well versed in this area....more

IRS Issues Revised Requirements for Employers to Claim FICA Tax Refunds

by McDermott Will & Emery on

On March 20, 2017, the Internal Revenue Service (IRS) issued Revenue Procedure 2017-28, which provides guidance to employers on obtaining employee consents used to support a claim for credit or refund of overpaid taxes under...more

Tax court finds no self-employment tax for passive LLC member

by Thompson Coburn LLP on

Self-employment (SE) tax is one of the driving forces when a tax advisor recommends what type of entity to use for one’s business. This article describes SE tax, lists some common exceptions, explains the suggestion that an...more

IRS Informally Rules on Taxability of Short-Week Supplemental Unemployment Benefits

by McGuireWoods LLP on

In Chief Counsel Advice 201634023, released Aug. 19, 2016, the IRS Office of Chief Counsel expressed its informal view (in the form of an email to an IRS employee) that “short-week” supplemental unemployment benefits (SUB)...more

IRS Audit Techniques Guide Provides Helpful Reminders for Sponsors of NQDC Arrangements

by Snell & Wilmer on

Last summer the Internal Revenue Service updated its Audit Techniques Guide (“ATG”) for nonqualified deferred compensation arrangements. While the ATG provides little instruction on how the IRS will review nonqualified...more

The Dear Departed: Making Final Wage Payments for Deceased Employees

by Littler on

The death of an employee is an unfortunate fact of life for businesses.  Nonetheless, employers may be ill-prepared for the inevitable issues that arise from the sad event.  Of concern are: Because state law largely controls...more

FICA Lawsuit Settles For Over $3 Million

I have previously blogged about a lawsuit brought by participants in a nonqualified deferred compensation plan where the employer failed to report and pay FICA (social security) taxes in the most tax advantageous way. The...more

PATH Act Allows R&D Credit to Reduce FICA Taxes for Certain Small Businesses

by McGuireWoods LLP on

The Protecting Americans from Tax Hikes (PATH) Act of 2015 makes permanent the research and development (R&D) tax credit, which had expired for amounts paid or incurred after December 31, 2014. In addition, the PATH Act gives...more

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Cybersecurity

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