From the desk of our CEO, Shruti Dhawan, here are some changes and updates that will impact your business.
W2s/1099 NEC Delivery
We are currently processing W2s for your company(s) and your office should be receiving the year-end package from us in the next week or two. Clients with Employee Self Service or MyGo services with us will be able to view W2s online, starting January 25th.
What is included in the package?
- W3 – For your business tax filing in March/April
- W2 – Employer copy
- W2 – Employee originals (in the envelope)
- If you have contract workers, you will also have a 1099 NEC- Employer copy and 1099 NEC- originals (in the envelope)
Changes in 2021
- Social Security wage base: Has increased from $137,70 in 2020 to $142,800 in 2021.
- Health Savings Accounts 2021 limits:
- Self only – $3,600, Family $7,200
- HAS catch up 0 $1,000
- 401(k) Contributions limits for 2021:
- Maximum Employee contribution is $19,500
- Catch-up over the age of 50, is $6,500
- Maximum employee + employer contribution excluding catch-up $58,000
- Other inflation adjustments for 2021
- Standard deduction for single taxpayers and for married taxpayers filing separately rises by $150 to $12,550, in 2021 from $12,400
- The standard deduction for married taxpayers filing joint returns rises by $300 to $25,100, up from $24,800.
- The standard deduction for heads of household rises by $150 to $18,800, up from $18,650.
- 1099- NEC
- Employers must use 1099 NEC to report nonemployee compensation if the following apply:
- Payment is made to someone who is not your employee.
- Payment is made for services in the course of your trade or business.
- Payment was made to an individual, partnership, estate, or corporation.
- Payments made to the payee were at least $600+ for the year.
- You do not have to issue a 1099 NEC to a company if they are a S-Corp or a C-Corp
Quote of the day:
First rule of 2021: No one talks about 2020.