IRS Provides Tax Inflation Adjustments for Tax Year 2020
Last week, the IRS announced the new annual inflation adjustments for over sixty tax provisions for the year 2020. It is important to note that the tax year 2020 adjustments are generally used on tax returns filed in 2021.
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401(k) Contribution Limit Increases
401(k) contribution limit increases to $19,500 for 2020; catch-up limit rises to $6,500.
The IRS announced today that the annual contribution limit for employees who participate in 401(k) plans will increase from $19,000 to $19,500 in 2020.
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How the R&D Credit Can Help New Companies Offset Payroll Taxes
According to the Protecting Americans from Tax Hikes (PATH) Act of 2015, new businesses or start-up companies that are eligible to receive research & development (R&D) credit can elect to offset employer portion of social security payroll tax liability. The maximum benefit an eligible company can claim against payroll taxes is $250,000 for up to five years. This payroll offset allows companies to receive a benefit for research activities even if they aren't profitable.
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