2019 Payroll Update

2019 Payroll Update

INSIGHTS

2019 Payroll Update

PAYROLL TAX DEPOSITS

If you are a semi-weekly federal tax deposit employer and your payroll tax deposit is less than $100,000, your tax deposit is due Friday, January 4, 2019 for any payroll checks dated December 31, 2018. Deposits due on January 4, 2019 must be initiated electronically by Thursday, January 3, 2019 to be considered timely for withdrawal on Friday, January 4, 2019. If your payroll tax deposit is greater than $100,000, it is due the next day after the date of the payroll check. For December 31, 2018 paychecks, you must initiate the payment on Monday, December 31, 2018 to ensure timely withdrawal on Tuesday, January 2, 2019.

 

UNEMPLOYMENT INSURANCE RATE NOTICE FOR 2019

State unemployment agencies are mailing the notices of the 2019 insurance rates to employers during the months of November and December 2018. 2019 rate information for Nebraska employers is also available online through your UICONNECT account. If our office assists you with the preparation of your payroll tax returns, please forward a copy of the 2019 rate notice to our office. In addition, the state agencies often provide an opportunity to reduce the 2019 insurance rate by making a voluntary contribution. If you would like our assistance in evaluating whether to make the voluntary contribution, please forward the notice to our office as soon as possible as there is a deadline for making this contribution.

 

EMPLOYEE ADDRESSES AND SOCIAL SECURITY NUMBERS

For the purposes of preparing your 2018 Forms W-2, please review your employee list to be sure you have communicated any name and address changes to our office. If we use your accounting software to prepare your Forms W-2, please review your file to be sure all employee names, addresses, and social security numbers are correct prior to sending the backup or export files.

 

REMINDER FORMS W-2 DUE DATE

The filing deadline for 2018 Forms W-2 to the Social Security Administration is January 31, regardless if filing on paper or electronically.

 

2019 PAYROLL CHANGES

There are several important changes which affect the calculation and payment of payroll taxes. Click the button below to view the updates.

 

2019 PAYROLL TAX UPDATE

 

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OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

GRAND ISLAND + NORTH 

403 Lexington Circle

Grand Island, NE 68803

P: 308.384.9910

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND + SOUTH

2722 S Locust Street

Grand Island, NE 68801

P: 308.382.7850

6 Things to Know About the Tax Cuts and Jobs Act

6 Things to Know About the Tax Cuts and Jobs Act

INSIGHTS

6 Things to Know About the Tax Cuts and Jobs Act

JUSTIN KORTH, SENIOR ACCOUNTANT

 

If the final couple months of 2018 snuck up on you, it’s not too late to do some tax planning for the current year. It may be time for a refresher on how the Tax Cuts and Jobs Act, passed last December, may affect you and/or your business.

 

If you’re filing for your own household, remember that:

1. The standard deduction has nearly doubled. All single taxpayers can now claim a $12,000 standard deduction. Married couples filing jointly will see an increase to $24,000. But the personal exemption has been eliminated, which may have an adverse effect for larger families.

2. Taxpayers who itemize will not be able to claim as many deductions. This isn’t as critical because of the increased standard deduction, but if you’re still planning to itemize, you’ll find that some deductions have been eliminated, including investment and tax preparation expenses and unreimbursed employee business expenses.

3. You can still deduct medical expenses if they exceed 7.5 percent of your Adjusted Gross Income (AGI). As far as charitable cash donations go, you’ll be able to deduct up to 60 percent of your AGI (the maximum was previously 50 percent). And if you bought a home after December 15, 2017, you’ll only be allowed to deduct mortgage interest on $750,000 of acquired debt, a reduction of $250,000. Interest on home equity loans is no longer deductible.

4. The deduction for state, personal property, and real estate taxes paid is now limited to $10,000. This change will likely force many taxpayers to use the standard deduction.

5. A bit of good news, the child tax credit has expanded. Taxpayers receive a $2,000 tax credit, of which $1,400 is refundable, for each qualifying child under age 17. The phase-out has also increased significantly, starting at $200,000 for single filers and $400,000 for joint filers.

6. Individual tax rates have been lowered. There are still seven brackets, but they now range from 10-37 percent instead of 10-39.6 percent. The brackets have also widened, meaning taxpayers benefit from lower rates on more dollars of income.

 

Good News (Mostly) for Businesses

Experts are still unpacking the Tax Cuts and Jobs Act, and some rules for businesses have yet to be clarified thoroughly. Some things are clear, like the drop in the corporate tax rate to a flat 21 percent.

Others are still a little hazy. Owners of sole proprietorships and pass-through entities, like S-corporations and partnerships, will be allowed to deduct 20 percent of their Qualified Business Income (QBI) if taxable income does not exceed $157,500 for single filers or $315,000 for joint filers. Taxpayers who report more than these limits will receive a reduced deduction. Some professions (legal, medical, accounting, and other service businesses) may not be eligible for the 20 percent deduction if taxable income exceeds certain thresholds.

We’re keeping up with everything that could have an impact on your 2018 taxes, whether it’s for personal or business income. We strongly suggest you contact us soon to help determine whether you need to take some action before the end of the year.

ABOUT THE AUTHOR

402.514.0007

jkorth@lutz.us

LINKEDIN

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JUSTIN KORTH + SENIOR ACCOUNTANT

Justin Korth is a Staff Accountant at Lutz with over 3 years of experience in taxation. He specializes in individual, business, and fiduciary income tax returns, estate and business planning, and taxpayer representation on IRS matters. In addition, he provides consulting on small business accounting and payroll tax reporting.

AREAS OF FOCUS
  • Income, Business, and Fiduciary Income Tax Returns
  • Taxpayer Representation
  • Estate and Business Planning
  • Payroll Processing
  • Payroll Tax Reporting
  • Client Accounting Services
  • Small Business Accounting Consulting
AFFILIATIONS AND CREDENTIALS
  • Nebraska Society of Certified Public Accountants, Member, Career Committee
  • Certified Public Accountant
EDUCATIONAL BACKGROUND
  • BSBA in Accounting and Finance, University of Nebraska, Omaha, NE
COMMUNITY SERVICE
  • UNO Young Alumni Academy, Member
  • St. Vincent de Paul Knights of Columbus, Member
  • Youth Catholic Professionals, Parish Ambassador

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © 2018 Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

GRAND ISLAND + NORTH 

403 Lexington Circle

Grand Island, NE 68803

P: 308.384.9910

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND + SOUTH

2722 S Locust Street

Grand Island, NE 68801

P: 308.382.7850

Updated Current Procedural Terminology Codes for 2019

Updated Current Procedural Terminology Codes for 2019

INSIGHTS

Updated Current Procedural Terminology Codes for 2019

The Current Procedural Terminology (CPT) code changes for 2019 are here! The American Medical Association (AMA) has announced the release of the 2019 CPT Code Set. The changes include 335 codes in the new CPT edition in an effort to capture the latest scientific trends and advances. The code changes include new remote patient monitoring codes and new internet consultation codes. These New CPT category I codes are effective for reporting as of Jan. 1, 2019.

Below are three tabs that include the new, deleted and revised CPT codes. Please remember to inactivate any 2018 codes that have been deleted. Included with the deleted codes are possible replacement codes for use if applicable.

AMA Releases 2019 CPT Code Set. September 5, 2018. Retrieved November 27, 2018 from https://www.ama-assn.org/ama-releases-2019-cpt-code-set 

RECENT POSTS

2019 Payroll Update

There are several important updates and considerations related to wages and year-end payroll duties. Please review the included topics and contact us if you have any questions…

read more

Norby Joins Lutz Financial

Lutz, a Nebraska-based business solutions firm, welcomes Bailey Norby to the Lutz Financial division in the Omaha office. Bailey joins the team as a Client Service Associate. She is responsible for the preparation and filing of client data…

read more

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © 2018 Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

GRAND ISLAND + NORTH 

403 Lexington Circle

Grand Island, NE 68803

P: 308.384.9910

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND + SOUTH

2722 S Locust Street

Grand Island, NE 68801

P: 308.382.7850

2019 Retirement Plan Limit Updates

2019 Retirement Plan Limit Updates

INSIGHTS

2019 Retirement Plan Limit Updates

KELLY MARTINSON, TAX SHAREHOLDER

 

2019 is the perfect time to boost your retirement plan since the IRS has announced new plan limits. These changes include increases for the 401(k), 403(b) and most government plans. In addition, it will produce benefits for many traditional pension plans and IRAs.  If you are the owner of a small business, it’s a good time to look at your employee retirement plan.

 

Changes for 2019

Next year, the IRS is allowing you to put away an extra $500 in your 401(k) and 403(b), raising the amount from $18,500 in 2018 to $19,000 in 2019. This increase applies to most government plans as well. IRA investors will finally be allowed to increase their contribution, with the limit changing from $5500 with a $1000 catch-up contribution, for those 50 and over, to $6000 with a $1000 catch-up.

If you belong to a traditional pension plan at work, you will also benefit from the new limits. The maximum annual benefit amount has been raised from $220,000 to $225,000. Your employer will be allowed to contribute up to $56,000, a change from 2018’s $55,000 limit.

 

Maximizing Your Retirement Plan Funding

In addition to upping your contribution, you can take some other steps to maximize your retirement plan.

  1. Experts recommend carefully reading your account statements so that you know exactly how much you are being charged in management fees.
  2. Keep an eye out for suspicious account activity. While you know to watch your bank accounts carefully, you may not realize that retirement funds are favorite targets of hackers as well.
  3. Ask your financial adviser about the Roth 401(k). Unlike the Roth IRA, the 401(k) does not have any income limits, which means it’s another excellent retirement tool for those in a higher income bracket than the average person.

 

Choosing a Retirement Plan for Your Business

When choosing a retirement plan for your business, you have many factors to consider. Some small business owners fear that they cannot afford to offer this benefit to their employees, but you have more options than you may realize.

For instance, a simplified employee pension (SEP) lets you contribute up to 25% of each employee’s wages. Employees do not contribute to the plan and there are no filing requirements for you. The SEP is not expensive to set up or operate, either. Finally, you can adjust the amount you contribute depending on the cash flow status of your business. If you hit a downturn, you can lessen your contribution.

You may also consider a Savings Incentive Match Plan for Employees (SIMPLE IRA plan) or a 401(k). Your financial adviser can help you choose an affordable plan that will benefit your employees and possibly give you welcome tax incentives. Your employees will also be more likely to stick around for the long term when they are more secure with their retirement.

In summary, the IRS has made changes for 2019 that allow you to boost your retirement plan contributions. As you are well aware, the cost of a long and happy retirement continues to rise, so making changes now will benefit you later. Meet with your financial planner before the beginning of the year and modify your approach to get the biggest benefit in 2019.

ABOUT THE AUTHOR

402.496.8800

kmartinson@lutz.us

LINKEDIN

KELLY MARTINSON + TAX SHAREHOLDER

Kelly Martinson is a Tax Shareholder at Lutz with over 22 years of experience in taxation. She primarily focuses on providing corporate and individual tax consulting and compliance services to clients in various industries.

AREAS OF FOCUS
AFFILIATIONS AND CREDENTIALS
  • American Institute of Certified Public Accountants, Member
  • Nebraska Society of Certified Public Accountants, Member, Board of Directors
  • Accounting & Financial Women’s Alliance – Omaha Chapter,  Member, Past President
  • Pension Council of the Midlands, Member, Treasurer
  • American Society of Pension Professionals and Actuaries, Member
  • Certified Public Accountant
EDUCATIONAL BACKGROUND
  • BS in Accounting, Finance, Information Management, with Highest Distinction, Dana College, Blair, NE
COMMUNITY SERVICE
  • Executive Women’s Golf Association - Omaha Chapter, Past President, Past Treasurer, Member
  • Lutheran Church of the Master, Past Church Council, Past Nominating Committee, Past Treasurer, Past Stewardship Committee Member
  • Foundation of the Master, Board of Directors

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © 2018 Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

GRAND ISLAND + NORTH 

403 Lexington Circle

Grand Island, NE 68803

P: 308.384.9910

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND + SOUTH

2722 S Locust Street

Grand Island, NE 68801

P: 308.382.7850

Narrow Scope Project Reflects Changing Distribution Methods

Narrow Scope Project Reflects Changing Distribution Methods

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Narrow Scope Project Reflects Changing Distribution Methods

On October 10, the Financial Accounting Standards Board (FASB) agreed to release for public comment a proposal from its Emerging Issues Task Force (EITF) to align the accounting for the production costs of TV shows with that for the costs of movies. The difference in the accounting for the costs of the two forms of content is based on guidance developed in the 1990s, when television shows primarily made money from being syndicated in reruns. The EITF says that that guidance is less relevant in an era of streaming content on the Internet.

 

What’s changing?

Under the amendment to U.S. Generally Accepted Accounting Principles (GAAP), TV producers would be allowed to account for production costs the same way filmmakers account for the costs of making movies.

The proposal would alter FASB Accounting Standards Codification (ASC) Topic 926-20, Entertainment — Films — Other Assets — Film Costs. The change would let the guidance for the cost of producing TV shows, which the FASB calls “episodic content,” be the same as the guidance for films.

 

Why is a change needed?

Established in the 1990s, ASC 926-20 was created based on the assumption that a high percentage of television shows fail. Production companies typically didn’t turn a profit until shows were in syndicated reruns. Therefore, the guidance allows creators of episodic content to capitalize costs only when the production company can establish estimates of so-called “secondary market revenue” (money a show will make in syndication).

“The distinct capitalization guidance for episodic content was established to address the business models and risks that were present in the production of episodic content when the guidance was originally issued,” says EITF research materials. “Since then, the Internet has changed the business environment in which media is produced and distributed by introducing new distribution channels and new industry participants. These industry changes may challenge the continued relevance of the capitalization model for episodic content.”

The EITF’s proposal is a reaction to a rapidly changing television industry. Customers no longer have to wait for a network to air a TV show in a specific time slot. Instead, today’s TV viewers can use Internet streaming services to watch single episodes or binge watch entire seasons at their discretion. The new distribution platforms significantly reduce producers’ risks for losing money on new TV shows.

 

What about amortization and impairment of capitalized costs?

During its September discussions, the EITF focused on the secondary effects of this decision, including whether a change in the cost capitalization guidance required changes to the amortization, impairment and disclosure requirements in ASC 926-20. EITF members decided to:

  • Retain the current amortization model,
  • Allow companies with transactions with no direct contracted revenue (such as those that receive subscription fees) to perform the impairment test at a group level, because impairment testing may be impractical at the individual film or TV show level, and
  • Add indicators to help production companies determine when an impairment had occurred.

 

When will the FASB issue a proposed update?

The FASB plans to publish this exposure draft by year end. Once the proposal is released, it will be subject to a 30-day comment period. Based on those comments, the FASB will deliberate and decide on the next steps for this narrow scope project.

 

 

©2018 THOMSON REUTERS

RECENT POSTS

2019 Payroll Update

There are several important updates and considerations related to wages and year-end payroll duties. Please review the included topics and contact us if you have any questions…

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Lutz, a Nebraska-based business solutions firm, welcomes Bailey Norby to the Lutz Financial division in the Omaha office. Bailey joins the team as a Client Service Associate. She is responsible for the preparation and filing of client data…

read more

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © 2018 Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

GRAND ISLAND + NORTH 

403 Lexington Circle

Grand Island, NE 68803

P: 308.384.9910

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND + SOUTH

2722 S Locust Street

Grand Island, NE 68801

P: 308.382.7850

Grace Period for “Good Faith” Income Tax Reporting Ends Soon

Grace Period for “Good Faith” Income Tax Reporting Ends Soon

INSIGHTS

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Grace Period for “Good Faith” Income Tax Reporting Ends Soon

Interpretive guidance from the Securities and Exchange Commission (SEC) temporarily lets public companies use good faith estimates to adjust for the income tax effects of the Tax Cuts and Jobs Act (TCJA). The Financial Accounting Standards Board (FASB) followed the SEC’s lead and also is allowing private companies to use good faith estimates. But the grace period expires in December. The SEC is advising companies that, once the grace period is over, they should be prepared to comply with the income tax reporting requirements in U.S. Generally Accepted Accounting Principles (GAAP).

Now that the grace period is ending, companies that follow GAAP (whether public or private) may find themselves unprepared if they haven’t yet invested adequate time and resources to understand how the TCJA will affect them.

 

Tax reporting under GAAP

Under GAAP, companies must adjust deferred tax assets and liabilities for the effect of a change in tax laws or tax rates. On the income statement side, the adjustment is included in income from continuing operations. The guidance applies even in situations in which deferred tax liabilities and assets are related to items presented in other comprehensive income (OCI), such as pension adjustments, gains or losses on cash flow hedges, and foreign currency translation adjustments.

Tax law changes happen frequently, but they usually aren’t as significant as those enacted by the TCJA, which is considered the biggest change to the tax code in 30 years. The effects may be difficult to estimate, especially for companies with global operations and those with significant deferred tax assets and liabilities on their balance sheets.

Customarily, companies that follow GAAP must report the effects of tax law changes when the changes are enacted. The TCJA was signed into law on December 22, 2017, in an atmosphere of unprecedented uncertainty and urgency. Given the scope of the changes, many companies were caught off guard.

 

SEC and FASB reactions

On the same day that the TCJA was enacted, the SEC issued Staff Accounting Bulletin (SAB) No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. This guidance has allowed companies to use “reasonable estimates” and “provisional amounts” for some line items for taxes when preparing their fourth-quarter and year-end 2017 financial statements.

Even though SABs apply directly to only public companies, in early 2018 a FASB Staff Q&A, Whether Private Companies and Not-for-Profit Entities Can Apply SAB 118, clarified that a private company or a not-for-profit entity voluntarily applying SAB No. 118 would be deemed in compliance with GAAP, provided that 1) all relevant aspects of SAB No. 118 are applied in their entirety, including the required disclosures, and 2) a statement that SAB No. 118 has been applied is disclosed as an accounting policy.

The SEC and FASB guidance gave public and private businesses a little extra time to digest the tax law changes that would impact them under the TCJA.

 

Need help?

The grace period instituted in SAB No. 118 ends on the first anniversary of the TCJA’s enactment. In September, SEC Deputy Chief Accountant Sagar Teotia told the Financial Accounting Standards Advisory Council that the SEC isn’t planning to extend the deferral longer than what was outlined in the original SAB. He explained that, over time, as the IRS has issued additional guidance on specific TCJA provisions, public companies have generally supplied more details about the effects of the TCJA.

However, Teotia isn’t focused on private businesses or not-for-profits with limited financial resources and expertise. Many of these entities may not fully understand the effects of the TCJA and, therefore, may need additional help complying with the accounting rules for income taxes in the coming months. Contact your CPA for more information on how the TCJA will affect your company’s financial statements in 2018 and beyond.

©2018 THOMSON REUTERS

RECENT POSTS

2019 Payroll Update

There are several important updates and considerations related to wages and year-end payroll duties. Please review the included topics and contact us if you have any questions…

read more

Norby Joins Lutz Financial

Lutz, a Nebraska-based business solutions firm, welcomes Bailey Norby to the Lutz Financial division in the Omaha office. Bailey joins the team as a Client Service Associate. She is responsible for the preparation and filing of client data…

read more

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © 2018 Lutz & Company, PC

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

GRAND ISLAND + NORTH 

403 Lexington Circle

Grand Island, NE 68803

P: 308.384.9910

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND + SOUTH

2722 S Locust Street

Grand Island, NE 68801

P: 308.382.7850