Introduction of 2022 U.S Tax Form 1099-K

New changes in 2022: On December 23, 2022, the IRS announced that calendar year 2022 will be treated as a transition year for the reduced reporting threshold of more than $600. For the years before 2022, third-party settlement organizations who issue Forms 1099-K are only required to report transactions where gross payments exceed $20,000 and there are more than 200 transactions.   What is Form 1099-K?   Form 1099-K, Payment Card and Third-Party Network Transactions is an information return that reports the gross amount of reportable transactions for the calendar year to the IRS.   What is Gross Amount?   The “gross amount” means the total dollar amount of total reportable payment transactions for each participating payee without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts. The dollar amount of each transaction is determined on the date of the transaction.   […]

The Composition of US Payroll Introduction

The Composition of US Payroll Introduction The payroll of employees of U.S. companies is governed by federal, state, and local regulations. It is generally comprised of gross income before taxes, federal and state personal income taxes, social security taxes and Medicare taxes, disability insurance, net income, etc. The following is a detailed description of each component, frequency of payroll, payroll taxes, and Form W-2. Composition of payroll Payroll is generally composed of gross income, payroll deductions, federal and state personal income taxes, social security taxes and Medicare taxes, disability insurance, and net income. Gross income is the total payment received by the employee before any deductions or taxes are taken out and includes any other type of earnings that an employee may have. For example, holiday pay, vacation or sick pay, bonuses, and any miscellaneous pay that the employee may receive. Payroll deductions are a variety of voluntary deductions that […]

Comparison for LLC and C-Corporation in Delaware

Comparison for LLC and C-Corporation in Delaware   This article will compare the difference between Delaware-Corporation and LLC from structure, registration requirements, and tax treatment.   Structure     Corporations Limited liability Companies No. of Shareholder/ Member At least 1 Shareholder At least 1 Member No. of Director 1 N/A Characteristics 1. Corporations are intended to provide limited liability; shareholders are generally not individually liable for the debts and obligations of the company. 2. Corporations are assessed corporate taxes on their own profits. Shareholders are taxed separately, if the company distributes dividends to them (or if it pays them a salary, in the case of employee owners). 3. Corporations are allowed to keep $250,000 in retained earnings without accumulated earnings tax. 1. LLCs are intended to provide limited liability for founders; moving liability for debts and obligations of the business from the entrepreneurs into the company itself. 2. LLCs offer […]

Comparison for LLC and C-Corporation in California

Comparison for LLC and C-Corporation in California   This article will compare the difference between California-Corporation and LLC from structure, registration requirements, and tax treatment.   Structure     Corporations Limited liability Companies No. of Shareholder/ Member At least 1 Shareholder At least 1 Member No. of Director 1 N/A Characteristics 1. Corporations are intended to provide limited liability; shareholders are generally not individually liable for the debts and obligations of the company. 2. Corporations are assessed corporate taxes on their own profits. Shareholders are taxed separately, if the company distributes dividends to them (or if it pays them a salary, in the case of employee owners). 3. Corporations are allowed to keep $250,000 in retained earnings without accumulated earnings tax. 1. LLCs are intended to provide limited liability for founders; moving liability for debts and obligations of the business from the entrepreneurs into the company itself. 2. LLCs offer […]

U.S. Tax Deadline for Individuals Extended to May 17

U.S. Tax Deadline for Individuals Extended to May 17   On March 17, 2021, the Treasury Department and Internal Revenue Services announced that the federal income tax filing due date for individual for the 2020 tax year will be automatically extend from April 15,2021 to May 17, 2021.   Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest, and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.   You do not need to file additional forms or call IRS to qualify for this automatic extension. Individual taxpayers who need […]

Comparison for LLC and C-Corporation in New York

Comparison for LLC and C-Corporation in New York   This article will compare the difference between New York-Corporation and LLC from structure, registration requirements, and tax treatment. And give you couple of examples of tax calculation for your reference.   Structure     Corporations Limited liability Companies No. of Shareholder/ Member At least 1 Shareholder At least 1 Member No. of Director 1 N/A Characteristics 1. Corporations are intended to provide limited liability; shareholders are generally not individually liable for the debts and obligations of the company. 2. Corporations are assessed corporate taxes on their own profits. Shareholders are taxed separately, if the company distributes dividends to them (or if it pays them a salary, in the case of employee owners). 3. Corporations are allowed to keep $250,000 in retained earnings without accumulated earnings tax. 1. LLCs are intended to provide limited liability for founders; moving liability for debts and […]

U.S. Tax Tips When You Got a PPP Loan

U.S. Tax Tips When You Got a PPP Loan Paycheck Protection Program (PPP) loan is intended to help small businesses maintain payrolls and continue necessary payroll-related payments like rent and utilities. And if you meet the criteria, the loan may be forgiven. However, some small business owners do not know how to deal with this PPP loan forgiveness when they file the tax return. This article will give you some tips.   Congress specified, and the IRS clarified, that forgiven PPP loans will not count as taxable income. This applies whether your entire loan is forgiven or just a portion.   For the expenses paid with PPP loan, IRS initially stated that those expenses cannot be deducted if the loan was or will be forgiven. However, that changed with the coronavirus relief act signed into law on Dec. 27, 2020, which specifies that deductions should not be denied simply due […]

Tax Changes You Need to Know Before Filing Your U.S. 2020 Tax Return

Tax Changes You Need to Know Before Filing Your U.S. 2020 Tax Return   There are several tax changes or annual inflation adjustments for tax year 2020. This article will give you a short checklist of tax changes you need to know before you file the 2020 tax return.   Stimulus Checks   During 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s $2 trillion relief package, the government sent up to $1,200 in the form of a stimulus check to millions of Americans. But do you know how to report your stimulus checks income when you file the tax return? The good news is your stimulus check will not count as taxable income. Eligible Americans who did not receive the first or second payment can claim a Recovery Rebate Credit based on their 2020 income on the 2020 tax returns.   Standard Deduction   Standard […]

Why I Receive the US Form 1099-INT?

Why I Receive the US Form 1099-INT?   If you received interest more than $10, you would get a Form 1099-INT. A 1099-INT tax form is a record that a person or entity paid you interest during the tax year. You may not have to pay income tax on all the interest it reports, but you still need to report this information on the return.   The Internal Revenue Service requires most payments of interest income to be reported on tax form 1099-INT by the person or entity that makes the payments. This is most commonly a bank, other financial institution, or government agency.   The form 1099-INT will include your Social Security Number or Taxpayer Identification Number and the amount you received. When you file your tax return, you don’t need to attach the copies of the form 1099-INT you receive, but you need to report the information from […]

Prepare for Your U.S. Tax Return

Prepare for Your U.S. Tax Return   The tax season is coming. Kaizen highly recommend you gather and prepare you tax documents in advance for your 2020 tax return. The sooner you file the tax return, the sooner you will get you refund. This article will give you a checklist of basic documents you should prepare.   Personal Information Social Security numbers and dates of birth for you, your spouse and other dependents on your tax return. If someone does not have a Social Security number, you will need their tax identity numbers instead. Copies of last year’s tax return, if possible.   Income Information Income from employment: you should receive the Form W-2 from your employer. Investment income: Various Form 1099, such as1099-INT or 1099-DIV. Income from state and local income tax refunds and/or unemployment: Forms 1099-G. Alimony income: taxable alimony received (only appliable to divorces finalized before January […]

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