Anthony Sykes & Company

                 When being employed by a family member, things can get complicated. That is especially true when it comes to tax responsibilities. Often, it depends on the relationship and the type of business. For example, a spouse is considered an employee if the first spouse makes the management decisions. Then their income is subject to income tax withholding, Social Security, and Medicare taxes.           When children are employed by their parents in a Sole Proprietorship or partnership, the wages are always subject to income tax withholding. However, only after the children turn 18 does Medicare and Social Security come into play. This changes when the business is a corporation or an estate. At that point, all wages are subject to withholding, Medicare, and Social Security. It does not matter how old the child is. If you are planning on starting a business and employing family member...

             Taxpayers and Tax Professionals alike must continue to be vigilant against security threats. This is a year-round concern. Criminals involved in identity theft will always be one step ahead and willing to try new tactics, but they usually involve similar methods. Being familiar with these methods goes a long way to keep you and your information safe.           They will attempt to phish the information they want through emails or text messages. The goal is to get you to give up passwords, bank account numbers, credit card numbers, and Social Security numbers. This is accomplished in two ways. The first is making you feel that the message is coming from someone or some entity that you trust. The second is that a false sense of urgency is created to make a person open a link or attachment, or in some other way give up their sensitive information.       ...

          Some are surprised to find out that their Social Security benefits can be taxed. This would apply to survivor, disability benefits, or monthly retirement income. Supplemental Security Income ( SSI ) cannot be taxed. The final outcome depends on the individual’s total income and filing status.           For example, someone who files as “Single” would have a lower threshold to meet for tax responsibility, than those who are “Married, Filing Jointly”. The greater the combined amount of Social Security and other income, the more their benefits will be taxed. It is easier than ever to create different streams of income, and this can change your tax situation. If you have a pension, a job in the gig economy (rideshare driver, food on demand delivery), or are active with cryptocurrency, to the Internal Revenue Service ( IRS ) this is all income. If you are not sure if you need to pay taxes on your benefits,...

         For about 15 million Taxpayers, the process of filing their taxes might get a little easier next year. A new tax form has been designed for those 65 and older, it is the Form 1040-SR . This form stands out from others because it uses large print, making it easier to read, and it has charts on the form itself, giving immediate answers to refund questions.           This new form should be ready for use in 2020. There are specific lines that can be used to list income from Social Security, IRS’s, pensions and other areas that are of interest to seniors. A Taxpayer must be at least 65 before January 1, 2020 to qualify to use this form. 

      When the IRS makes a change, they try to tell Taxpayers about it, so the adjustment is made easier. The Tax Cuts and Jobs Act is a huge change, and they have been slowly letting all of us know about how things will look moving forward. January 1 is just around the corner! Most of us would think Tax Reform applies to those still in the workforce. It certainly does, but it will have a great impact on those who have retired and are living off their pension, Social Security, or an annuity.        Simply put, they need to make sure they are withholding enough tax from their retirement income. If not, these older Taxpayers will be in for a shock. Sending in estimated payments, 4 times each year, is recommended to make sure everything stays balanced. Each source of income has unique rules to follow, so it is strongly encouraged for those in this situation to seek the help of a Qualified Tax Professional. They can help navigate this n...

          Can it be possible to pay Federal Income Tax on Social Security benefits? The short answer is: yes. There are situations where this can happen. Beyond this fact, there are a number of States that also might tax Social Security income. Here are a few points to keep in mind.           States that do not have their own Income Tax will obviously not tax Social Security income. So if you live, or are planning to move to, a State like Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, or Wyoming, this will not be an issue. Other States give an exemption to Social Security income. This is true for States like Alabama, California, Delaware, Hawaii, Idaho, Maine, Massachusetts, Oklahoma, and Oregon. However, Minnesota, North Dakota, Vermont and West Virginia will apply Federal guidelines to Social Security income. States like Colorado, Connecticut, Kansas, North Dakota, and U...