Tax Cuts and Jobs Act: What’s New and How Will It Affect Your 2018 Tax Return?

We recently had the pleasure of presenting a seminar on the effect of the Tax Cuts and Jobs Acts on businesses and individuals. This is the first in a series of blog posts highlighting the information covered.

While we were all focused on the changes that were coming courtesy of the new Tax Cuts and Jobs Act, a number of additional tax law revisions took effect. The following is a brief recap.

Partnership Audit Regime Laws – Federal Law

Starting January 1, 2018, this Federal Law allows tax to now be accessed at the partnership level. While this is an administrative win, it comes with hidden ramifications to the taxpayer:

  • Assessed at the highest individual rate of tax – which is currently 37%
  • The 20% 199A (flow-through) deduction is no longer applicable
  • Current partners can be assessed for deficiencies from the year prior.

As a result, we recommend that all partnerships evaluate your partnership agreements.

1099 Withholding and Filing Requirements – State (Pennsylvania) Law

These requirements also went into effect on January 1, 2018.

The 1099 Withholding Requirement means you must engage in withholding on Pennsylvania-sourced non-employee compensation to non-residents. This includes business income and leases of real estate. This withholding is currently on a volunteer basis if the entity receiving payment is receiving $5,000 or less per year.

The new filing requirements state that starting in 2018, 1099s and W2s are required to be filed electronically if you are filing 10 or more forms. However, the Pennsylvania Department of Revenue is granting a waiver for the 2018 filing period. Learn more about this requirement in one of our previous blog posts.

Wayfair Decision Affecting Revenue from Online Sources

The Wayfair Decision brings economic nexus to online transactions. “Physical nexus” is when the consumer is making a purchase from a store or transacting with a business with a physical location. With the growth of online shopping, many B2C and B2B transactions take place with companies who do not have a physical presence in Pennsylvania, but their product is coming into Pennsylvania. With the Wayfair Decision, if you are a Pennsylvania-based business conducting online sales with people or companies outside of Pennsylvania, you may have multi-state filing requirements. Most states have differing thresholds, so if you are selling one or two items in a year and do not reach their particular threshold, you would not be required to file.

As always, if you have any questions or concerns regarding these changes, please call us at 215-723-4881. You may also consult our free online 2018-19 Tax Planning, which can be found here.

To view the portions of his seminar that were broadcast via Facebook Live, please visit our Facebook page.

Pennsylvania Department of Revenue Issues News Electronic Filing Requirement

The Pennsylvania Department of Revenue recently changed the electronic filing requirement threshold for W-2 forms. Employers who file 10 or more W-2 forms with the department are now required to file those forms electronically.

This change is in effect for Tax Year 2018 filings. Employers should visit e-TIDES, the department’s online system for business taxes to file the Annual Withholding Reconciliation Statement (REV-1667), which had a deadline of January 31, 2019. Copies of the individual wage withholding statement (W-2) must also be filed electronically with the form REV-1667. The department will grant a waiver for the 2018 tax-filing season with regard to the electronic filing requirement, but it is encouraging employers to take advantage of this option, which is quick, easy and secure.

This change is part of a larger effort to embrace technology to serve taxpayers better and update departmental operations. The department gains many efficiencies in processing by shifting from paper to electronic records.

To this point, the department continues to receive a large number of W-2 records via fax and on compact discs. It takes significant information technology resources to transfer these records into the department’s computer systems manually. Also, if an employer submits paper W-2s, the department must use an entirely manual process to key the taxpayer’s information into its systems, slowing processing times and increasing the potential for error.

The move toward more electronic filing also helps the department increase the security of taxpayer data and safeguard against tax refund fraud. The change is also in line with other electronic filing requirements the department has implemented for other returns and informational statements.

If you have any questions regarding the electronic filing, please visit the Department’s Business Taxes e-Services Center or call 717-787-7635.

If you have additional questions where we might be of service, please call 215-723-4881 or contact us online.

New W-4 Form for 2019

The IRS has issued the new W-4 form for 2019. This is an ideal time to do a Paycheck Check-up, to ensure you’re having the right amount of funds withheld each pay period.

If you have any questions about your specific situation, please consult with your tax advisor. If you do not currently have a tax advisor, we welcome the opportunity to serve you. Please call 215-723-4881 or contact us online.

“Starting Your Own Business” Class with Brent Thompson, CPA CMA CGMA

Are you thinking of starting your own business? Then plan on attending the aptly-named “Starting Your Own Business” class presented by Canon Capital’s Brent Thompson as part of the Souderton Area School District’s Community Education program.

This four-hour class takes place in two, two-hour sessions 7:00 – 9:00 p.m. on Tuesday, February 26 and Thursday, February 28, 2019.

During the class, Brent will cover:

  • Business entity structures and the advantages, disadvantages, and tax ramifications of each.
  • Concepts to help your new venture be more successful.
  • An overview of financing, accounting, insurance, titled assets, home office deductions, auto mileage rules, buy/sell agreements, and more.

Bring any questions you might have to class. Cost is $30.00. Register with SACE online (from the left sidebar of the page select “Evening School,” “Life Planning & Organizing,” and then “Starting a Business.”). View the full program catalog here (Please note, the catalog shows this class as happening in two separate, two-hour sessions. It is one full course presented in the four hours of the two evening sessions.)

Canon Capital is Open for Business in Our New Harleysville Office

We are settling in at our new office, located at 484 Harleysville Pike, Harleysville, PA 19438.  We are awaiting final signage and landscaping. In the meantime, please use the photo in this blog and the directions below to help you travel to our new location. Please note: the main entrance is on the side of the building; not the street-facing entrance.

Directions from Routes 113 & 63

  • Head southwest on Route 113 South (heading toward Lederach/Skippack)
  • Continue on Route 113 South, passing the Harleysville Post Office on your right.
  • Follow Route 113 around the bend and our new office will be on your left.

Directions from Routes 113 & 73

  • Head northeast on Route 113 North (heading toward Harleysville/Souderton)
  • Continue on Route 113 North, through the five points intersection in Lederach
  • Follow Route 113 North; shortly after passing Cheswyck Drive on your right, our building will be on the right.

We look forward to your first visit to our new space, with all four of our business units — CPA, Payroll, Technologies, and Wealth Management — waiting to serve you.

Moving Day is Here: Canon Capital is Moving to New Harleysville Location

Moving Day has arrived! Please note the following regarding our access and availability January 23-28, 2019 as we move our Hatfield and Souderton offices to our new Harleysville location:

Wealth Management
The Wealth Management office is currently in the process of moving. Staff will be accessible via phone and email.

Accounting, Payroll, & Technologies
These business units will begin moving Thursday, January 24. The Souderton office will be accessible until the end of business on Thursday, January 24. Staff will be accessible via phone and email.

There may be delays in communication during this time as we transition to the new location. We are planning that Monday, January 28, 2019 will be our first official day of business in our new location:

484 Harleysville Pike
Harleysville, PA 19438
Click for directions.

Our telephone number (215-723-4881) remains the same.

Thank you.

 

Join us January 29 for a Free Seminar – The Tax Cuts and Jobs Act: What’s New?

Are you a business owner curious about what the new developments will mean for your 2018 return? Then join us Tuesday, January 29 as we, along with QNB Bank and the Indian Valley Chamber of Commerce, share the latest updates, including:

  • NEW Section 199A 20% Passthrough Deduction for S Corps, Partnerships, LLC’s and sole proprietors
  • NEW Partnerships Audit Examination Rules and How to Protect Yourself
  • NEW Bonus Depreciation and Section 179 Limits
  • NEW Pennsylvania 1099 Withholding Requirements
  • NEW Changes in Capital Gains, Mortgage Interest, State and Local Tax Deductions and More

Register with the Indian Valley Chamber of Commerce online or via phone at 215-723-9472 by January 22, 2019.

(Download the event flyer.)

Be Prepared with Our 2018-19 Tax Planning Guide

The full impact of the Tax Cuts and Jobs Act of 2017 will be realized with the filing of 2018 returns. Be prepared by consulting our 2018-19 Tax Planning Guide. Stay up to date with the most recent tax news and the latest facts, with relevant information for individuals, investors, and business owners.

This resource is available to you right now. It is the first item listed on the Useful CPA Links and Resources page of our website.

If you have any questions about this or any other element of your tax planning, we are glad to be of service. Call 215-723-4881 or contact us online.

Canon Capital’s Special Guests Greet Reindeer Runners

On Saturday, December 1, 2018, we continued our annual tradition of providing a water station as participants in the Generations of Indian Valley Annual Reindeer Run complete the unforgiving hill of Main Street Souderton. Our own Sarah Hughes (who finished in first place in her category) and Brian Erkes participated alongside the rest of the reindeer antlered, ugly sweater-wearing runners and walkers. We even spotted Batman! However, they couldn’t top our water station volunteers; Canon Capital’s Mike Witter was joined by The Grinch and the big man himself, Santa Claus. The Reindeer Run benefits the programs of Generations of Indian Valley, including their Meals on Wheels service.

View the complete photo gallery on our Canon Capital Facebook page and the Generations of Indian Valley Facebook page.