Nesteggg Accounting

Archives for June 2018

California Cannabis: 3 important things to check before the July 1st deadline

Here are 3 important things to check before the July 1st deadline:

  1. Sell or destroy non-compliant inventory by June 30th to comply with the BCC’s transition period requirements.
  2. Make sure you’re collecting appropriate excise & sales taxes on your pre-2018 legacy products.
  3. Have you applied for your temporary license extension? Please let us know where you are in the licensing process here if you haven’t already. This is the best way to ensure a smooth transition to track and trace.

1. Reminder: Sell or destroy non-compliant inventory by June 30th.

June 30, 2018 marks the end of the “grace period” dispensaries had to sell cannabis products that wouldn’t meet the Bureau of Cannabis Control’s new regulations.

What we recommend:

  • Prepare to sell or destroy non-compliant inventory by June 30th.
  • Stock up on tested, compliant product prior to June 30th in the event that there are shortages in supply beginning July 1st.
  • Train your staff on the new regulations to reduce the risk of employees accidentally putting you out of compliance.

What do California dispensaries need to do by June 30th?

Dispensaries need to sell or destroy non-compliant inventory by June 30th. The complete list can be found below, via the California Cannabis Portal.

2. Collect appropriate taxes.

Product purchased prior to January 1st, 2018, and goods produced under a micro business license require you to collect excise tax at the Register. Your sales tax on these products also needs to include an appropriate percentage of the excise tax value (source: CA Tax Guide for Retail Cannabis Business).

If you haven’t found the best way to calculate this, we have a solution here.

3. Help us help you transition to Track & Trace.

Where are you in the licensing process?

If you haven’t already, please let us know where you are licensing process here. This is the best way to ensure a smooth transition to Track & Trace.

July 1st is the date in which all licensed operators must abide by the rules set forward by the Bureau of Cannabis Control

July 1st is the date in which all licensed operators must abide by the rules set forward by the Bureau of Cannabis Control. As such, many retailers, cultivators, and manufacturers have stockpiles of what will soon be deemed “non-compliant” product. In other word, products that do not have proper labels, dosage above the maximum, and are untested. So, as the date approaches, many retailers that hold licenses will be slashing numbers to get rid of such products in the upcoming weeks. With the BCC stepping up enforcement and Lori Ajax proclaiming that “it’s about time” to start shutting down non-compliant businesses, it surely puts a lot of pressure on cannabis businesses to get rid of non-compliant product.

There are several issues with this July 1st deadline, which we will dive into in this email. First, almost no one has been testing their products in laboratories until recently. I’ve spoken to several heads of laboratories in California, Oregon, and Canada. The California market has been slow to adopt to using laboratories. As such, the labs are now expecting a major clot as newly licensed businesses try to catch up to speed. “Too many people are waiting until July 1st! They don’t know that the process takes a while, and that they should’ve been doing it since January!,” said one of the owners of a lab.

This is coupled with that fact that some of the biggest markets – Los Angeles and San Francisco (and many, many others) have not even open their doors to licensing. Yet, the Cities are asking people to go out of pocket on expenses for labs without giving them a clear schedule towards licensing. It’s the “chick or the egg” conundrum. Should businesses be compliant and get licensed or should businesses get licenses and then become compliant? At the end of the day, any compliant business owner knows exactly how much it costs to run a cannabis business. Some of the heftiest expenses include:

  • Security Costs
  • Video Surveillance costs (extremely expensive to store data for 3 months as per regulations)
  • Taxes
  • Track & Trace as well as Record Keeping Services

This, on top of the fact that there are no licensed laboratories in Los Angeles, have put many people in a tight spot. Indeed, in order to qualify for Phase II, a business must have a formal agreement with a licensed lab. This will surely need to be done with the few laboratories that are licensed and open in SoCal. In other words, this will further create a clot in product that is supposed to be compliant by July 1st.

Now that we see all of these problems coming forward, it is easy to see why investors are speculating that the price of cannabis goods will spike due to shortages. To many consumers, cannabis prices are already sky-high with incredible taxes. For example, some cities have taxes of up to 10% of gross sales! Not only that, many cities require that business owners also donate money as part of a neighborhood benefits plan. As such, with a shortage of tested products, the consumer will face the consequences of inflated prices.

This will, ultimately, help bolster illegal operations. As mentioned in my previous email, as a member of Nugg, I often see “NO TAXES” proudly displayed on some of the delivery services. Many of them also entice me with “FREE PRE-ROLL WITH EVERY ORDER” yet this too is illegal under new regulations. With tons of non-compliant businesses raking in cash and not paying taxes, the State is leaving those that chose to be compliant and obtain a license in a tight spot. Despite being blatantly available online, the BCC has been unable to win its battles with WeedMaps and other such websites that advertise unlicensed businesses.

In a perfect world, the BCC would be able to enforce its regulations and shut down all unlicensed locations – especially those bold enough to admit to not paying taxes online. I wonder, is it a good time to invest in cannabis? With all the dips there are also highs – pun intended. Though the state of the industry may seem chaotic today, the fact that so many people have chosen to become licensed has enabled the industry to stay strong. As more and more cities open to licensing, more and more people will be able to monitor the industry. Indeed, as licensed cannabis businesses, it behooves us to enforce the rules of the game in which we’ve all elected to play.

Information for the Cannabis Industry: How Tax Applies to Immature Plants, Clones, and Seeds

Information for the Cannabis Industry: How Tax Applies to Immature Plants, Clones, and Seeds

Cultivation Tax
The cultivation tax does not apply to the sale or transfer of immature plants, including clones or seeds. The cultivation tax is imposed on cultivators for harvested cannabis that enters the commercial market; however, the definition of “enters the commercial market” specifically excludes immature plants and seeds.

Excise Tax
Immature plants, clones, and seeds are subject to the 15 percent cannabis excise tax when sold at retail. Nurseries may sell immature plants, clones, or seeds to another cannabis licensee. However, a distributor is required to transport the cannabis from the nursery to the licensee and when the immature plants, clones, or seeds are sold or transported to a retailer, the distributor is also required to collect the 15 percent cannabis excise tax from the retailer based on the average market price of the immature plants, clones, or seeds. The retailer is responsible for collecting the cannabis excise tax from their retail customers when the immature plants, clones, or seeds are sold at retail.

Sales and Use Tax
Sales tax applies to the retail sale of immature plants, clones, and seeds. Sales and use tax does not apply to a cultivator’s purchase of immature plants, clones, and seeds when the products grown from them will be resold as part of the cultivator’s regular business activities. The seller should obtain and keep a valid and timely resale certificate from the purchaser as support that the sale was for resale. For information on sales for resale and resale certificates, see publication 103, Sales for Resale.

This email is intended to give you an overview of how tax applies to immature plants, seeds, and clones and does not address all requirements for the cannabis industry. For additional information, we encourage you to read our online Tax Guide for Cannabis Businesses, or contact us

Is it really the IRS calling on your business?

Is it really the IRS calling on your business?

The IRS wants to help the small business and self-employed communities determine whether an unsolicited contact is truly from an IRS employee.

The IRS initiates most contacts through regular mail delivered by the U.S. Postal Service. However, there are special circumstances in which the IRS will call or come to a business, such as when a taxpayer has an overdue tax bill, to secure a delinquent tax return or a delinquent employment tax payment, or to tour the business as part of an audit.

See: How to know it’s really the IRS calling or knocking on your door for more information.

Taxpayers Can Connect with the IRS on Their Phone

Taxpayers Can Connect with the IRS on Their Phone

Anyone with tax questions can just grab their phone for answers. The IRS has a mobile app, IRS2Go, which is available for free to use on Android and iOS devices. It’s also available on Amazon. Taxpayers use the app to:

  • Check the status of their refund.
    Taxpayers can check on their refund status within 24 hours after the IRS receives their e-filed return, or about four weeks after mailing a paper return.
  • Make a payment.
    The app offers easy access to mobile-friendly payment options like IRS Direct Pay. This offers the taxpayer a free, secure way to pay directly from their bank account. Users can also make a credit or debit card payment through an approved payment processor.
  • Find free tax preparation assistance.
    Eligible taxpayers can access free tax software from their mobile device to quickly prepare and file their taxes and get their refund. Taxpayers who got an extension of time to file their taxes can use the app to file through the October extended filing deadline.
  • Get Helpful Tips and Information.
    Taxpayers can use the app to link to IRS accounts on social media. Users can do things such as watch helpful videos and access IRS tweets. Taxpayers can also use the app to sign up to receive IRS Tax Tips by email.
  • Stay Secure.
    Users can use IRS2Go to create login security codes for certain IRS online services. This allows the taxpayer to retrieve codes through IRS2Go instead of using text messages.

IRS2Go is available in both English and Spanish.

Dos and Don’ts for Taxpayers Who Get a Letter from the IRS

Dos and Don’ts for Taxpayers Who Get a Letter from the IRS

Every year the IRS mails millions of letters to taxpayers for many reasons. Here are some tips and suggestions for taxpayers who receive one:

Don’t ignore it. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do.

Don’t panic. The IRS and its authorized private collection agencies do send letters by mail. Most of the time all the taxpayer needs to do is read the letter carefully and take the appropriate action.

Do take timely action. A notice may reference changes to a taxpayer’s account, taxes owed, a payment request or a specific issue on a tax return. Taking action timely could minimize additional interest and penalty charges.

Do review the information. If a letter is about a changed or corrected tax return, the taxpayer should review the information and compare it with the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return, and keep it for their records.

Don’t reply unless instructed to do so. There is usually no need for a taxpayer to reply to a notice unless specifically instructed to do so. On the other hand, taxpayers who owe should reply with a payment. IRS.gov has information about payment options.

Do respond to a disputed notice. If a taxpayer does not agree with the IRS, they should mail a letter explaining why they dispute the notice. They should mail it to the address on the contact stub at the bottom of the notice. The taxpayer should include information and documents for the IRS to review when considering the dispute. The taxpayer should allow at least 30 days for the IRS to respond.

Do remember that there is usually no need to call the IRS. If a taxpayer must contact the IRS by phone, they should use the number in the upper right-hand corner of the notice. The taxpayer should have a copy of the tax return and letter when calling.

Do avoid scams. The IRS will never initiate contact using social media or text message. The first contact from the IRS usually comes in the mail. Taxpayers who are unsure if they owe money to the IRS can view their tax account information on IRS.gov.

Mid Year Business Tax Planning & Review

As an entrepreneur needing to ensure your business is on track for progress, it is vital to direct a mid-year review of your funds. Indeed, a decent warm-climate excursion far from work might be more enticing than assessing money related spreadsheets, however it’s imperative to check your advance part of the way through so you can maintain a strategic distance from potential inconvenience not far off. A “registration” part of the way through the year, particularly as it identifies with your assessments, can guarantee your business is on focus to meet its year-true objectives. As you lead your money related registration, think about the accompanying guidance.

Do

Consider your general decision of business elements

For those simply beginning a business at the mid-year point, you should set aside opportunity to survey the most fitting element write, particularly from an obligation or duty viewpoint. There are many alternatives, including sole proprietorship, association, C organization, Subchapter S company and LLC. Each kind of business has their points of interest and disservices. In spite of the fact that it is best to pick the correct element from the begin, make sure to evaluate the prizes and weaknesses, regardless of whether you as of now work a business. On the off chance that there is an alternate element compose that will square with better monetary outcomes for your business, roll out the important improvement.

Evaluate your health coverage plans

Medical coverage has turned into a hotly debated issue of discussion among private ventures—and in light of current circumstances. In the event that you are an entrepreneur, survey your organization’s well being scope designs and analyze costs. It might be valuable and financially savvy to purchase medical coverage under an independent company design, instead of exclusively. Contrast diverse medical coverage designs with reveal better premium rates for your business. Likewise, in the event that you are an entrepreneur that has less than 25 representatives, and you offer medical coverage to your workers, you may fit the bill for the private venture human services charge credit.

Get everything sorted out

A half year worth of costs of doing business, derivations, and other duty data is less demanding to sort out two times per year, than a year worth of that toward the finish of the year—just before charges are expected. Getting everything all together part of the way through the year won’t just make charge arrangements twice as simple, yet will likewise help you monetarily get ready for the following a half year with regards to benefit projections, business buys to augment impose reasoning’s, and that’s only the tip of the iceberg.

Evaluate possible tax deductions for capital investments and expenditures

Investigate the gear you have bought for business purposes, and in addition the enhancements you have made to your office. You might disregard key tax reductions accessible through devaluation derivations.

Don’t

Disregard you and your families personal financial goals

In the event that you are an entrepreneur, don’t simply consider your business objectives—keep your very own monetary objectives at the cutting edge. Talk about these objectives with your money related counselor, as they are the best asset to enable you to accomplish them. Make certain you are augmenting individually sparing openings, which should be possible through retirement arranging, benefit sharing designs, streamlined representative annuity designs and that’s only the tip of the iceberg. Sparing presently will help anchor an agreeable retirement.

Put off your tax filing responsibilities

In the event that your business required more opportunity to document its duties, and you filed for an extension, don’t wait. Despite the fact that organizations and associations have up until the point that September 15 to document, use the late spring to precisely and appropriately set up your arrival. You would prefer not to hold up until Labor Day and hurry through the documenting procedure. The additional time you spend on your arrival, the better your arrival will be. Furthermore, once your business records, set aside the opportunity to survey your arrival. Are there alterations that should be made? Provided that this is true, make the modifications currently to boost the advantages of one year from now’s arrival.

Postpone meeting with a tax preparer

In spite of the fact that tax season may appear to be far away, plan a gathering with your tax preparer. He or she can help audit your present expense announcing and suggest any vital changes. Furthermore, your tax preparer can distinguish and perceive fitting chances to concede pay acknowledgment and quicken reasonings to help diminish charges through legitimate expense arranging.

Neglect a check-up even if you miss the mid-year mark

A check-up at six months is best, but depending on how things go and who you have to help you, it’s easy to miss the mid-year mark and skip the check-up. Even if you miss it and you are finally able to check in on everything at eight months, still do it. Work with a financial advisor and make sure everything is in order. It will make your life far easier than if you wait to finally check in only when taxes are about due.

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Summary

A mid-year audit of your business’ funds won’t just help your feelings of anxiety at year end, it might likewise build your organization’s income. Consider it. Who doesn’t care for getting a check via the post office from the IRS? Set aside the opportunity to take a gander at those reports and make vital changes in accordance with enable your business to meet its objectives. One thing is for sure—you will love it.

 

Cannabis Banking Blues: How Best To Get A Bank Account

Cannabis Banking Blues: How Best To Get A Bank Account

Securing a bank account will not be easy, but it is possible if you are in the right state and you prepare and act accordingly.

In my previous post, I wrote about avoiding the scammers that abound when it comes to cannabis banking. Because cannabis is federally illegal, getting a bank account has been very difficult for cannabis businesses even though the 2014 FinCEN guidelines allow financial institutions to provide banking services to cannabis businesses under certain circumstances — which guidelines are still alive despite Attorney General Jeff Sessions rescinding the Cole Memo. Ultimately, FinCEN makes clear in its guidelines that they “should enhance the availability of financial services for, and the financial transparency of, marijuana-related businesses.”

But what exactly should a cannabis business do to get a legitimate bank account with a real financial institution? Plain and simple, you make it as easy as possible for the bank or credit union to abide by the FinCEN guidelines. This means you do not lie about or omit anything regarding your cannabis business.

To even get to this point though, your cannabis business must be in a state with “robust regulations” that give its regulators the authority to tightly control and govern its cannabis industry. And not all states are created equal when it comes to this.

In states like Washington, Oregon, and Colorado, banking is made a little easier because those states have hardcore regulations ranging from financial and criminal background checking on all cannabis business owners to knowing every single dollar that comes into a given cannabis operation and its source. In medical cannabis states like New Mexico and Arizona, which are basically unregulated medical cannabis states, banking is non-existent.  And in California (where I am based), which still has relatively weak cannabis licensing rules (for example, there are no spousal vetting requirements for owners of cannabis businesses), it is still nearly impossible for a cannabis business to get a bank account and this is not likely to change until California tightens up on its licensing regime.

But if you’re in a state with robust cannabis regulation, here’s what you need to do and expect when pursuing a bank account under the FinCEN guidelines:

  1. Banks that follow the FinCEN guidelines do so in open violation of the Bank Secrecy Act (BSA). This is the case because they are directly engaging in money laundering because cannabis remains federally illegal and this is why virtually none of the really big banks (like Bank of America and Wells Fargo) will knowingly take on cannabis accounts. But for those banks that are willing to take on cannabis bank accounts, you need to be prepared to basically do whatever the bank tells you to do to secure that account because the bank will be the one to be held accountable to the federal government for violating the BSA.
  2. You should expect your bank or credit union to conduct comprehensive due diligence on your cannabis business — nearly always at your expense. This due diligence usually will include the following:

(i) verifying with the appropriate state authorities whether your cannabis business is duly licensed and registered;

(ii) reviewing your cannabis license application and other documents your cannabis business submitted to obtain its state license to operate;

(iii) requesting information about your business and its related parties from state licensing and enforcement authorities;

(iv) developing an understanding of the normal and expected activity of your business, including the products to be sold and the type of customers to be served (e.g., medical versus recreational customers);

(v) ongoing monitoring of publicly available sources for adverse information about your business and its related parties;

(vi) ongoing monitoring for suspicious activity, including for any of the red flags described in the FinCen guidance; and

(vii) constantly updating the above information.

  1. Don’t get frustrated with the bank or credit union over this mandatory due diligence. Your job is to fork over as much documentation as you can to demonstrate that you are licensed and in full compliance with state and local laws.
  2. The Cole Memo, though rescinded, still matters to FinCEN. Specifically, the FinCen guidelines state that “[a]s part of its customer due diligence, a financial institution should consider whether a marijuana-related business implicates one of the Cole Memo priorities or violates state law. This is a particularly important factor for a financial institution to consider when assessing the risk of providing financial services to a marijuana-related business. Considering this factor also enables the financial institution to provide information in BSA reports pertinent to law enforcement’s priorities. A financial institution that decides to provide financial services to a marijuana-related business would be required to file suspicious activity reports (“SARs”).” This means you should review the eight Cole Memo priorities and implement them in your business practices.
  3. Your bank will regularly file SARs on your business. A financial institution is required to file a SAR if it knows, suspects, or has reason to suspect that a transaction conducted or attempted by, at, or through the financial institution: (i) involves funds derived from illegal activity or is an attempt to disguise funds derived from illegal activity; (ii) is designed to evade regulations promulgated under the BSA; or (iii) lacks a business or apparent lawful purpose. Because commercial cannabis activity is federally illegal, SARs are a must in the cannabis banking world.
  4. The following SARs will likely apply to your cannabis business: (i) Marijuana limited SARs, which mean you are not violating state law or violating a Cole Memo priority; (ii) Marijuana priority SARs, which mean the bank believes you are violating state law or a Cole Memo priority; and (iii) Marijuana termination SARs, which mean the bank thinks you are a threat to its anti-money laundering systems under the BSA so it must end its relationship with you. All these SARs get sent to the federal government for possible investigation.
  5. Your bank will constantly monitor the financial activity of your cannabis business because it must do so under the FinCEN guidelines. Your bank will monitor everything from your deposits to your social media accounts to your ability to keep your license in good standing to ensure that you are complying with state laws and rules. Again, if you want to keep your bank account, you need to assist your bank with this continued due diligence.
  6. The FinCEN guidelines list various red flags banks must watch for. One of those red flags is using management companies or middlemen to secure your bank accounts. The FinCEN guidelines are clear that Cole Memo priorities may be violated if a “customer seeks to conceal or disguise involvement in marijuana-related business activity. For example, the customer may be using a business with a non-descript name (e.g., a “consulting,” “holding,” or “management” company) that purports to engage in commercial activity unrelated to marijuana, but is depositing cash that smells like marijuana.” Cash structuring, commingling of funds with an unrelated business, and “deposits by third parties with no apparent connection to the accountholder” are additional red flags. Pay attention to the FinCEN guidelines’ red flags list and strive to avoid them.

Securing a bank account will not be easy, but it is possible if you are in the right state and you prepare and act accordingly. Though state public banking and cryptocurrency have been floated as ways to provide wider access to banking, the FinCEN guidelines are still the key for both cannabis operators and financial institutions. And that’s not likely going to change anytime soon.

 

Thanks to cannabisbusinessexecutive.com and Hilary  Bricken

Beginning July 1, 2018, cannabis goods must meet all statutory and regulatory requirements

TRANSITION PERIOD REQUIREMENTS

The transition period in the licensing authorities’ regulations allowing exceptions from specific regulatory provisions ends on June 30, 2018. Beginning July 1, 2018, cannabis goods must meet all statutory and regulatory requirements. Cannabis goods that do not meet all statutory and regulatory requirements must be destroyed in accordance with the rules pertaining to destruction.
LABORATORY TESTING REQUIREMENTS:
Beginning July 1, 2018, a licensee may only sell cannabis goods that have been tested and passed all testing requirements in effect at the time of testing.

– Untested cannabis goods cannot be sold by a retailer and must be destroyed. A retailer may not send cannabis goods to a distributor for testing.
– Untested cannabis goods manufactured or harvested before January 1, 2018, in possession of a distributor that are owned by the distributor must be destroyed.
– Untested cannabis goods manufactured or harvested before January 1, 2018, in the possession of a distributor owned by a manufacturer or cultivator may be returned to the licensee who owns the cannabis goods. If a cultivator or manufacturer chooses to sell the returned cannabis goods, the cannabis goods must be sent to a distributor for testing and must meet all of the testing requirements in effect at the time of testing before transported to a retailer for sale.

 

PACKAGING AND LABELING REQUIREMENTS:

Beginning July 1, 2018, all packaging and labeling must be performed prior to cannabis goods being transported to a retailer.

– A retailer shall not accept cannabis goods that are not properly packaged and labeled. A retailer shall not package or label cannabis goods, even if the cannabis goods were in inventory before July 1, 2018. However, for medicinal sales, retailers will place a sticker on cannabis goods stating, “FOR MEDICAL USE ONLY” upon sale to a qualified medicinal consumer, unless the statement is already printed on the package.
– A retailer may not send unpackaged cannabis goods to another licensee for packaging or labeling. Cannabis goods in possession of a retailer that do not meet packaging and labeling requirements must be destroyed.
– Exit packaging is not required to be child-resistant and can no longer be used to satisfy the child-resistant packaging requirements. All cannabis goods must be in child-resistant packaging prior to delivery to a retailer.

 

THC LIMITS FOR EDIBLE CANNABIS PRODUCTS:

Beginning July 1, 2018, edible cannabis goods may not exceed 10 milligrams of THC per serving and may not exceed 100 milligrams of THC per package.
THC LIMITS FOR NON-EDIBLE CANNABIS PRODUCTS:
Beginning July 1, 2018, non-edible cannabis products must meet package THC restrictions.

– Non-edible cannabis products shall not contain more than 1,000 milligrams of THC per package if intended for sale only in the adult-use market.
– Non-edible cannabis products shall not contain more than 2,000 milligrams of THC per package if intended for sale only in the medicinal market.

INGREDIENTS AND APPEARANCE OF CANNABIS PRODUCTS:

Beginning July 1, 2018, a retailer may only sell cannabis products that meet the requirements set by the California Department of Public Health for ingredients or appearance.
The requirements listed above can also be found in the transition period fact sheet located here on our website: http://www.bcc.ca.gov/about_us/documents/transition_period_fact_sheet.pdf
For additional information about transition period requirements, or to subscribe to email alerts to hear about updates as they become available, please visit the Bureau’s website at
http://www.bcc.ca.gov/. For information on all three state licensing authorities, please visit the state’s California Cannabis Portal at https://cannabis.ca.gov/. Follow the Bureau on Facebook, Twitter and Instagram for daily news and updates.
Those looking to get in touch with the Bureau of Cannabis Control can call our Call Center at (833) 768-5880, or send an email to bcc@dca.ca.gov.

WITH THE NEW TAX RATES… SHOULD YOU MAKE CHANGES TO YOUR W-4?

WITH THE NEW TAX RATES… SHOULD YOU MAKE CHANGES TO YOUR W-4?

HELLO, WE AT NESTEGGG WORK WITH THE INTERNAL REVENUE SERVICE IN CONJUNCTION TO OUR CLIENTS AND THOUGHT YOU MAY BE WONDERING… WITH THE NEW TAX RATES… HOW SHOULD YOU MAKE SURE YOU DON’T END UP WITH AN UNEXPECTED TAX BILL NEXT YEAR?

TO KNOW FOR SURE… USE THE IRS WITHHOLDING CALCULATOR AVAILABLE AT WWW.IRS.GOV. IT WILL WALK YOU THROUGH THE PROCESS AND DETERMINE HOW MANY PERSONAL ALLOWANCES YOU SHOULD CLAIM.

IF THE CALCULATOR RESULTS SUGGEST YOU SHOULD CHANGE YOUR WITHHOLDING … YOU WILL NEED TO SUBMIT A NEW W-4 FORM TO YOUR EMPLOYER TO WITHHOLD THE CORRECT AMOUNT OF TAXES FROM YOUR PAY.

YOU CAN DOWNLOAD A W-4 FORM FROM I-R-S-DOT-GOV-SLASH-W-4.   FILL OUT THE TOP WITH YOUR PERSONAL INFORMATION, ON LINE FIVE … PUT THE ALLOWANCES SUGGESTED BY THE CALCULATOR.

IF YOU NEED TO WITHHOLD MORE TAXES… YOU CAN ADD THAT AMOUNT ON LINE SIX AND ONLY USE LINE SEVEN IF YOU QUALIFY TO CLAIM A TOTAL EXEMPTION FROM WITHHOLDING.

ONCE YOU’RE DONE… SIGN… DATE… AND GIVE YOUR NEW W-4 FORM TO YOUR EMPLOYER AS SOON AS POSSIBLE; KEEP IN MIND… THE FEWER ALLOWANCES YOU ENTER ON THE FORM … MEANS MORE TAX WILL BE WITHHELD FROM YOUR PAYCHECK.

  •      SO ENTERING “ZERO” OR “ONE” ON YOUR W-4 WILL MEAN MORE TAX IS WITHHELD.
  •      BUT ENTERING A LARGER NUMBER WILL MEAN LESS TAX WILL BE WITHHELD…

THE ABOVE COULD RESULT IN A SMALLER TAX REFUND… OR POTENTIALLY A TAX BILL WHEN YOU FILE YOUR TAXES NEXT YEAR.

THE EARLIER YOU CHECK … THE MORE TIME THERE IS FOR WITHHOLDING TO TAKE PLACE EVENLY DURING THE REST OF THE YEAR.  WAITING MEANS THERE ARE FEWER PAY PERIODS TO MAKE THE TAX CHANGES… WHICH COULD HAVE A BIGGER IMPACT ON EACH PAYCHECK.

  •      SO DON’T DELAY YOUR PAYCHECK CHECKUP.
  •      GET STARTED AT IRS WITHHOLDING CALCULATOR AVAILABLE AT WWW.IRS.GOV.

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