The Internal Revenue Service (IRS) provides a large supply of information that is useful not only to business owners but to their employees as well. These resources are free to the public and are must-reads for anyone involved with a company-sponsored retirement plan.
1. IRS Withholding Calculator
The Withholding Calculator can help employees determine whether they need to give their employer a new Form W-4 to avoid having too much or too little federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form.
Things you will need handy are:
- Your most recent pay stubs
- Your most recent income tax return
Estimate values if necessary, and remember that the results will be no more accurate than the input you provide.
2. 401k Plan Information
A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts.
This page also provides tips on participating in a plan.
3. Mileage Rates
The IRS page on Mileage Rates provides a table that summarizes the optional standard mileage rates for employees, self-employed individuals, or other taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.
These rates sometimes apply to employees, but can also apply to business owners.
4. Home Office Deductions
If you use part of your home exclusively and regularly for conducting business, you may be able to deduct expenses known as Home Office Deductions.
This resource gives information on Home Office Deductions and provides related forms and publications necessary to determining the percentage of your home devoted to your business activities, repairs, and depreciation.
5. Earned Income Tax Credit
The Earned Income Tax Credit, EITC or EIC, is a benefit for working people with low to moderate income. EITC reduces the amount of tax you owe and may give you a refund.
6. Child and Dependent Care Credit
You may be able to claim the Child and Dependent Care Credit if you paid expenses for the care of a qualifying individual to enable you (and your spouse, if filing a joint return) to work or actively look for work.
Additional information you may find useful:
- Form 2441, Child and Dependent Care Expenses (PDF)
- Child and Dependent Care Credit – Essential guide
- Child and Dependent Care Expenses – Detailed guide
For more tips and information regarding retirement plans, follow our blog.