Jack Woods

 

Central Business Solutions 

301 Lynnfield Street, P.O. Box 3169 Peabody, MA 01960

 

Phone:  978-532-0266

Fax:      978-532-9105

 

1147 Main Street, Suite 213, P.O. Box 299 Tewksbury, MA 01876

 

Phone: 978-851-8044

Fax:     978-851-9332

 

Email: jack@cbps.com

June 2021

June 2021 Q and A

Question and Answer

Question:
Can I choose my tax filing status?


Answer:
Generally, your marital status on December 31 determines your filing status for that year. And choosing the proper status affects the amount of tax you’ll owe. When multiple filing statuses apply, select the one that results in the least amount of tax due. If you’re unmarried, you’ll generally file as single unless you have a dependent; then you may be able to file as head of household. And if you become a widow or widower, but don’t remarry and have a dependent, you may claim the Qualified Widow(er) status for the two tax years after your spouse passes, which gives you the same tax perks as married filing jointly. Married taxpayers can file a joint return or file separately. Married filing separately can be used when it results in less tax owed or when one spouse wants to be responsible for their own tax.


Question:
I am a sole proprietor but need to hire an employee. Are fringe benefits taxable to my employee?


Answer:
As a general rule, all fringe benefits are taxable to your employee unless the IRS has expressly excluded them. Common fringe benefits that are tax free include health insurance, life insurance, employee discounts, employer-provided cell phones, certain commuting benefits, and de minimis (minimal) benefits like small non-cash holiday gifts or office-supplied coffee and drinks.


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