New forms, instructions and pubs on IRS.gov
Forms:
- Form W-2, Wage and Tax Statement (Info Copy Only)
Instructions:
- Inst W-2 and W-3, Instructions for Forms W-2 and W-3, Wage and Tax Statement and Transmittal of Wage and Tax Statements
Pubs:
Archives for September 2018
LAX travelers can carry Marijuana
Los Angeles International Airport is allowing travelers to carry marijuana at the giant hub — news that sent a ripple of glee and surprise across Twitter and Reddit on Wednesday.
“Seems like so long ago when I had to hide a baggie in my undies,” one Reddit user commented.
In reality, the LAX marijuana policy isn’t new. Travelers there have been allowed to carry up to 28.5 grams of marijuana and 8 grams of concentrated marijuana for personal consumption since January 2018, when California law legalized recreational marijuana in the state, according to Los Angeles Airport Police spokesperson Alicia Hernandez.
“Based on our policy, we’re not going to arrest you or confiscate marijuana,” Hernandez said in a phone interview with McClatchy.
But travelers hoping to carry marijuana through LAX should still be aware that they have to get past U.S. Transportation Security Administration agents at LAX, Hernandez said — and at the federal level, marijuana is still very much illegal.
Planes fly through federal airspace, as the LAX policy webpage acknowledges, meaning federal law prohibiting marijuana possession is applicable.
“We are two different entities,” Hernandez said. “TSA can deny you coming through the checkpoint. The checkpoint is their jurisdiction.”
So what will TSA agents do at LAX?
“TSA’s focus is on terrorism and security threats to the aircraft and its passengers,” TSA spokesperson Lorie Dankers said in an email, adding that “TSA’s screening procedures, which are governed by federal law, are focused on security and are designed to detect potential threats to aviation and passengers.”
When a TSA agent discovers marijuana on a traveler or in luggage, agents are instructed to refer the violation to law enforcement, Dankers said. That’s the policy regardless of where the traveler is in the country, and regardless of where the traveler is headed — even if the states involved have legalized marijuana.
“Law enforcement officials will determine whether to initiate a criminal investigation or what steps – if any – will be taken,” Dankers said, adding that “whether or not the passenger is allowed to travel with marijuana is up to law enforcement’s discretion.”
Hernandez said if that law enforcement agency is the LAX police department, individuals won’t face arrest.
“We’re not going to be taking any action against you for having that marijuana,” she said.
That doesn’t mean passengers who are held up will make their flight, though — or that marijuana will be legal wherever the traveler lands.
L.A. City Councilman Mitch Englander has proposed marijuana “amnesty boxes” for travelers at the airport to drop their weed into before encountering TSA checkpoints, the Los Angeles Times reported earlier this year.
“You could be at a minimum held over and searched and miss your flight,” Englander said, according to the Times, even though marijuana is legal in the state.
There are 20 such bins at McCarran International Airport in Las Vegas, where marijuana has been prohibited, despite the fact that it’s legal in Nevada, according to the newspaper.
Other law enforcement agencies in California said air travel with marijuana remains a gray area, CNBC reports.
“We’re really not in a place to do anything,” said Sgt. Ray Kelly of the Alameda County Sheriff’s Office, which has jurisdiction over Oakland International Airport, according to CNBC. “If the TSA says we don’t want it [to get into the airport], we would have to intervene.”
It’s a similar situation at Orange County’s John Wayne Airport, USA Today reports.
“If the TSA calls us [about finding marijuana], we’d go up and make sure it is within the legal quantity. If it is, we’d just stand by while the passenger decides what to do with it,” said Lt. Mark Gonzales of the Orange County Sheriff’s Department, according to USA Today. “TSA may not want it to fly, but that doesn’t mean it is illegal in California.”
Special Thanks to GFarma News and Vanessa Alvarez for content share
Educate your clients, employees and partners about estimated taxes
Educate your clients, employees and partners about estimated taxes
The U.S. tax system is pay-as-you-go. Taxes must be paid as income is earned or received during the year. Help us teach the nearly 10 million taxpayers that faced an estimated tax penalty last year how they can prevent these penalties.
You can help by informing taxpayers how they can adjust paycheck withholding amounts or make estimated tax payments.
Also remember, the Tax Cuts and Jobs Act, enacted in December 2017, changed the way tax is calculated for most taxpayers, including those with substantial income not subject to withholding.
Ensure your clients, employees and partners are spared tax-related “surprises” in 2019 by passing on these easily sharable YouTube videos, drop-in articles, tax tips and news releases with links to Spanish versions, online tools and lots more information:
- Avoid penalty for underpayment of taxes; IRS says check withholding, make estimated payments
- Taxpayers should find out if they need to make estimated or additional tax payments
- Here’s how and when to pay estimated taxes
- Employees with other sources of income should do a Paycheck Checkup
- Retirees: Avoid a surprise tax bill; get enough tax taken out of pension payments; IRS Withholding Calculator can help
- IRS YouTube videos: “Estimated Tax Payments”
English | Spanish | ASL - Drop-in articles posted to the Tax Reform Resources page
Large employers can now e-file their employment tax returns
Large employers can now e-file their employment tax returns
Employers who meet the definition of “large employers” now have the option to e-file their employment tax returns (e.g., Forms 940, 941) without the need for a third party.
These large employers are generally required to e-file other returns, such as Form 1120. To do this, they use Form 8453 for the signature, electronically attach it to their tax return, and use their e-file software to file.
Similarly, they may now e-file their employment tax returns. Simply use Form 8453-EMP, Employment Tax Declaration for an IRS E-file Return, for the signature, and electronically attach it to the employment tax return. Then e-file it using the same software used to electronically file other tax returns.
This option is available now, so large employers may use it to e-file their third quarter employment tax returns due in October.
Find more information and the definition of a large employers in section 5 of Pub 4163, Modernized e-File (MeF) Information for Authorized IRS e-File Providers for Business Returns.
Filing extensions for Forms W-2 and 1099-MISC are not automatically approved
Filing extensions for Forms W-2 and 1099-MISC are not automatically approved
Treasury Decision 9838, Extension of Time to File Certain Information Returns (found in Internal Revenue Bulletin 2018-34), is the final ruling and clarifies that extension requests for Forms W-2 and 1099-MISC will not be automatically approved.
Requests for extensions must meet specified criteria and be requested on Form 8809, Application for Extension of Time to File Information Returns, before the January 31 deadline to file. This will deter identity theft and refund fraud. Requests for extensions of the filing deadline have no effect on the deadline to furnish forms to recipients.
The IRS will create a revised Form 8809 for the 2019 filing season that will provide checkboxes for employers to show the reasons they’re asking for an extensions.
Stay tuned to e-News for Payroll Professionals for an announcement of the revised Form 8809 expected sometime in late fall of 2018.
A Toke and a Smile: Coca-Cola Could Dip Toes in Cannabis Pool
The Coca-Cola Co. said it is “closely watching” the expanding use of a cannabis element in drinks, another sign cannabis and cannabis-infused products are getting more acceptance in mainstream culture and a harder look from long-established pillars of American business.
The statement came Tuesday, Sept. 18, 2018, after reports the beverage giant was in talks with a Canadian cannabis company to create a health drink infused with cannabidiol (CBD), a naturally occurring, non-intoxicating compound derived from the cannabis plant. Shares of the company, Aurora Cannabis Inc., closed up nearly 17 percent on the Toronto Stock Exchange after the report.
Spokespeople for the companies declined to comment on the report but acknowledged their interest in that segment of the cannabis market.
CBD does not produce the high commonly associated with marijuana — that is due to its more widely known cannabinoid cohort, THC. It is believed by many to have anti-inflammation and pain-relieving properties, and numerous CBD-infused products have emerged recently.
Aurora spokeswoman Heather MacGregor said her company “has expressed specific interest in the infused-beverage space and we intend to enter that market.”
A Coca-Cola spokesperson said the beverage giant has made no such decision.
“Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world. The space is evolving quickly,” said the spokesperson, Kent Landers.
Coca-Cola’s interest is another indication of the growing acceptance of cannabis by established companies and of the importance of Canada to the development of those businesses. Marijuana becomes legal across Canada on Oct. 17, 2018. Cannabis companies from the U.S. — where marijuana remains illegal at the federal level — have flocked to Canada to raise funds and establish businesses there.
American companies interested in making a play in the cannabis space can try things out in Canada without risking doing something illegal at home.
Constellation Brands, a giant spirits company that counts Corona beer among its labels, bought a multibillion-dollar minority stake in Canopy Growth, a Canadian medical marijuana producer. Molson Coors Co. was also seeking partnerships with Canadian canna-businesses to stem a decline in its established American and Canadian beer brands.
Coca-Cola’s statement shows the company has learned from its past missteps picking up on new drink trends, said Ali Dibadj, a senior analyst at AllianceBernstein with an expertise in U.S. beverage and snack food companies.
“The company has been caught flat-footed in the past in not keeping up with trends in beverages. They missed the energy drink phenomenon, they missed — and then had to buy into — the functional waters like Vitamin Water, and coffee,” Dibadj said. “I think what they’re saying is what they should be saying on this very new and emerging beverage.”
But testing the waters of cannabis-themed drinks could backfire, he said. Many Americans aren’t intimately familiar with the cannabis plant and might not understand that CBD has no psychoactive properties.
Hemp and marijuana are both cannabis plants, and both contain CBD, which can be extracted as an oil that can be added to edibles, topicals, and more.
“I think you have to be very, very careful with this as a large brand. There are different viewpoints on a product category, and you don’t want to offend too much,” Dibadj said. “You don’t want to be too far ahead on any curve.”
Special Thanks to www.marijuana.com and Gillian Flaccus for content share
Form W-4 for 2019 will be similar to 2018 version
Form W-4 for 2019 will be similar to 2018 version
Following feedback from the payroll and tax communities, the Treasury Department and the IRS will incorporate important changes into a new version of the Form W-4, Employee’s Withholding Allowance Certificate, for 2020. The 2019 version of the Form W-4 will be similar to the current 2018 version. A new draft version of the W-4 for 2019 will be available in the coming weeks.
The IRS will continue working closely with the payroll and the tax community as it makes additional changes to the Form W-4 for use in 2020. The new version will help employees improve withholding accuracy, and fully reflect changes included in the Tax Cuts and Jobs Act.
For the current 2018 tax year, the IRS continues to strongly urge taxpayers to review their tax withholding situation as soon as possible to avoid having too little or too much withheld from their paychecks. Click here to perform a quick “paycheck checkup” using the IRS withholding calculator.
The Tax Cuts and Jobs Act changed the way tax is calculated.
The IRS encourages everyone to perform a “paycheck checkup” to see if you have the right amount of tax withheld for your personal situation.
For employees, withholding is the amount of federal income tax withheld from your paycheck. The amount of income tax your employer withholds from your regular pay depends on two things:
- The amount you earn.
- The information you give your employer on Form W–4.
For help with your withholding, you may use the Withholding Calculator. You can use the Withholding Calculator to estimate your 2018 income tax. The Withholding Calculator compares that estimate to your current tax withholding and can help you decide if you need to change your withholding with your employer.
More details about the Withholding Calculator and the new 2018 withholding tables can be found on the Frequently Asked Question pages:
Everything to Know About the Form W-4
A standout amongst the most imperative finance tax documents is set for an upgrade—once more.
On June 6, the IRS distributed a draft variant of the 2019 Form W-4 to reflect changes made by a years ago’s notable expense change charge. The news speaks to a finish on office comments made at a finance gathering recently. You can read Namely’s inclusion of that occasion here.
Recompenses Eliminated
While the full name of the Form W-4 remains the “Withholding Allowance Certificate,” any notices of duty stipends have been generally stripped from the frame.
For setting, remittances are claims a representative can make to diminish their assessable wage. Before, workers could guarantee a kid, ward, life partner, or even themselves as a stipend. The frame incorporated an individual remittance worksheet that representatives could use to compute what amount ought to be withheld from their paychecks to abstain from owing come assess documenting season. You can take in more about stipends here.
The new, draft rendition of the shape gets rid of this decades-old process and the recompense worksheet. Keeping in mind the end goal to decide paycheck withholdings, it rather requests that workers show particular dollar sums for various fields including:
Nonwage pay including interest or profits
For people with different occupations or the individuals who are hitched and anticipating recording mutually, the aggregate sum earned from different employments
Organized and different conclusions
Extra sum workers need to withhold from every paycheck
On the off chance that a representative feels awkward sharing their nonwage or life partner’s salary with their boss, the shape trains them utilize the IRS’s online mini-computer to decide the amount to incorporate into the extra sum withheld field.
HR Implications
HR and finance experts should take note of that the as of late distributed Form W-4 speaks to a working draft. The office is relied upon to distribute a finished variant of the 2019 frame by late August.
Given the real ramifications of duty change, the IRS has encouraged citizens to “check their check” this year and alongside abstain from documenting season shocks. While the office has not yet shown that it will require all representatives to document new Form W-4s for 2019, it will probably unequivocally urge them to. At any rate, HR groups should refresh their onboarding procedure to join the new frame.
Facts to help taxpayers understand Individual Retirement Arrangements
Facts to help taxpayers understand Individual Retirement Arrangements
Individual Retirement Arrangements – better known simply as IRAs – are accounts into which someone can deposit money to provide financial security when they retire. A taxpayer can set up an IRA with a:
- bank or other financial institution
- life insurance company
- mutual fund
- stockbroker
Here are some terms and definitions related to IRAs to help people learn more about how the arrangements work:
Traditional IRA: Contributions to a traditional IRA may be tax-deductible. The amounts in a traditional IRA are not generally taxed until you take them out of the account.
Savings Incentive Match Plan for Employees: commonly known as a SIMPLE IRA. It allows employees and employers to contribute to traditional IRAs set up for employees. It is ideal as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan.
Simplified Employee Pension: Better known simply as an SEP-IRA, it is a written plan that allows an employer to make contributions toward their own retirement and their employees’ retirement without getting involved in a more complex qualified plan. An SEP is owned and controlled by the employee.
ROTH IRA: An IRA that is subject to the same rules as a traditional IRA with certain exceptions. For example, a taxpayer cannot deduct contributions to a Roth IRA. However, if the IRA owner satisfies certain requirements, qualified distributions are tax-free.
Contribution: The amount of money someone puts into their IRA. There are limits to the amount that someone can put into their IRA annually. These limits are based on the age of the IRA holder and the type of IRA they have.
Distribution: Essentially a withdrawal. This is the amount someone takes out from their IRA.
Required distribution: A taxpayer cannot keep retirement funds in their account indefinitely. Someone with an IRA generally must start taking withdrawals from their IRA when they reach age 70½. Roth IRAs do not require withdrawals until after the death of the owner.
Rollover: This is when the IRA owner receives a payment from retirement plan and deposits it into a different IRA within 60 days.
More Information:
- Publication 560, Retirement Plans for Small Business
- Traditional and Roth IRAs Comparison Chart
- Publication 590-A, Contributions to Individual Retirement Arrangements
- Publication 590-B, Distributions from Individual Retirement Arrangements
- Retirement: Pensions, IRAs, Social Security
- Topic No. 412 Lump-Sum Distributions
- Topic No. 557 Additional Tax on Early Distributions from Traditional and Roth IRAs
- Topic No. 558 Additional Tax on Early Distributions from Retirement Plans Other Than IRAs
- Topic No. 413 Rollovers from Retirement Plans
- Topic No. 451 Individual Retirement Arrangements
- Topic No. 558 Additional Tax on Early Distributions from Retirement Plans Other Than IRAs
- IRS Tax Map: Individual Retirement Arrangement
- IRS Tax Map: Roth IRA
Retirees with pension income should do a Paycheck Checkup ASAP
Retirees with pension income should do a
Paycheck Checkup ASAP
Retirees should do a Paycheck Checkup to make sure they are paying enough tax during the year by using the Withholding Calculator, available on IRS.gov. The Tax Cuts and Jobs Act, enacted in December 2017, changed the way tax is calculated for most taxpayers, including retirees.
Because of this law change, retirees who receive a monthly pension or annuity check may need to raise or lower the amount of tax they pay in during the year. The easiest way to do that is to use the Withholding Calculator or read Publication 505, Tax Withholding and Estimated Tax. Though primarily designed for employees who receive wages, this online tool can also help those who receive pension or annuity payments on a regular schedule, usually monthly or quarterly.
Taxpayers who do not choose to have taxes withheld from their income should make estimated tax payments. This income includes pension and annuity income, and the taxable part of social security benefits. Estimated tax payments are due quarterly. The remaining due dates for 2018 payments are Sept. 17, 2018 and Jan. 15, 2019. Taxpayers can pay their taxes anytime throughout the year as long as they indicate the tax year and where to apply the payment. They can visit IRS.gov/payments to explore all IRS payment options.
Here are some things retirees should know about their withholding and using the calculator:
- Like employees, retirees can use the calculator to estimate their total income, deductions and tax credits for 2018.
- When using the Withholding Calculator, retirees should treat their pension like income from a job by entering:
- The gross amount of each payment
- How often they receive a payment, such as monthly or quarterly
- The amount of tax withheld so far this year
- Before using the calculator, users should have a copy of last year’s tax return. In addition, knowing or having a record of the total federal income tax withheld so far this year will also make the tool’s results more accurate.
- Based on the taxpayer’s responses, the Withholding Calculator will recommend the number of allowances a pension recipient should claim. If the number is different from the number they are claiming now, they should fill out a new withholding form. If claiming zero allowances still doesn’t cover their expected tax bill, the tool will recommend asking their payor to withhold an additional flat-dollar amount from each pension payment.
- Pension recipients can make a withholding change by filling out Form W-4P, and giving it to their payor. The IRS urges retirees to submit Forms W-4P to their payors as soon as they can. This gives payors time to apply withholding changes to as many payments as possible this year.
- Because of the limited time left in 2018, some retirees may be unable to adequately cover their expected tax liability through withholding. In that case, a taxpayer could instead make an estimated or additional tax payment directly to the IRS.
How Does Medical Cannabis Differ From Recreational Cannabis?
How Does Medical Cannabis Differ From Recreational Cannabis?
Medical cannabis use typically focuses more on the concentration and type of cannabidiol (CBD) and how it affects certain medical conditions. Recreational marijuana focuses more on the concentration and type of THC, the chemical found in marijuana that causes the high feeling.
This is a general rule that can help people distinguish between the two. For many, it’s a confusing area, especially with so much debate about marijuana in the media on an almost daily basis.
The following offers more details on the differences between medical cannabis and recreational cannabis. They may come from the same plant, but the approach in producing both is different.
Medical Cannabis
The use of medical cannabis has now been approved in more than half of the U.S. states. Each state typically lists diseases and conditions under which medical cannabis can be legally used. Most also require getting a medical cannabis card and having marijuana recommended by a doctor.
While the exact list tends to differ between states, the conditions eligible for marijuana use include epilepsy or chronic seizures, nausea in association with cancer treatments, and chronic pain. Medical cannabis also is legal in some states for use to treat anxiety.
People don’t use medical cannabis to “get high.” Instead, the CBD that naturally occurs in the plant has a positive impact on the above conditions. Cancer patients, for example, can rediscover their appetite even if going through chemotherapy. Children who experience epileptic seizures may see them reduced in frequency and intensity.
This is allowed by state law only, so it’s important to research the state laws in your area. The federal government continues to classify marijuana as a Schedule I illegal drug.
Recreational Cannabis
It’s tempting to say that recreational marijuana focuses on getting people high, but that is an oversimplification. It also calls to mind the stereotypical “stoner” sitting on the couch all day.
Nothing could be further from the truth in modern times. In the states where recreational cannabis is legal, people have started to use it as an alternative to a “drink after work” or on social occasions. It increasingly is becoming popular among professionals and with women.
In a legal, regulated system, recreational cannabis also is not like it was in the black-market days. Then, anyone who wanted to try marijuana was not only breaking the law but also buying from someone they didn’t know and having to use whatever they got.
Marijuana today is more akin to the craft beer movement. People can visit a dispensary and get advice on what strain is best for them or their situation. Some cannabis strains promote energy and focus. Others are better for relaxation on a “stay in and read a book” day or “Netflix night.”
It’s important to also realize that in a regulated environment, both medical cannabis and recreational cannabis have gone through an inspection process. That cuts out harmful material often found in the black-market marijuana of old.
Those are some of the differences between medical cannabis and recreational cannabis. They have significant differences and are designed for use in completely different ways.
Special Thanks to Dispensaries.com for content share