LENIENCY GRANTED.
The IRS announced it will generally waive an underpayment penalty for taxpayers who come up short on their withholding or estimated tax payments, but paid at least 85% of their total tax liability for 2018. Typically, taxpayers have to cover at least 90% of their tax owed to avoid a penalty. The IRS is granting this break due to the uncertainty that came with the 2018 tax law changes.
DEDUCTION INCREASED.
Speaking of tax breaks, the IRS increased the deduction taxpayers can take when using their vehicle for business to 58 cents per mile. That’s up 3.5 cents from 2018. The standard mileage rate remains 14 cents per mile for use of an automobile in “rendering gratuitous services to a charitable organization” and is 20 cents per mile (up 2 cents) for vehicles used to obtain certain medical care. The business depreciation deduction for vehicles bumps up a penny, to 26 cents per mile.
SIZE MATTERS.
The bigger your company, the more likely it is to offer employees a retirement plan. The life insurance marketing organization LIMRA found that 42% of small businesses, those with between 2 and 99 employees, offer retirement benefits. LIMRA and other researchers have shown that the availability of retirement benefits encourages employees to save.
INFLATION TAMED.
The Consumer Price Index (CPI), which accounts for all urban consumers of all items, rose a modest 1.9% in 2018. Airline fares declined 2.6%, while shelter at 3.2% led the annual increases.