Professional Accounting Blog

    Accounting For Your Prosperity

    DeWine Signs House Bills Changing Ohio Income Tax Law

    Posted by Jonathan Ciccotelli on Sep 5, 2019 9:33:59 AM

    Topics: Tax Planning & Strategies

    House Bills 62 and 166 were signed by Ohio Governor Mike DeWine on August 23, 2019.  These bills will enact several important changes to the Ohio income tax law for the 2019 tax year.  These changes will apply to income tax returns due on April 15, 2020.  

    The upcoming tax changes are explained below:

    Tax rates

    • Ohio is combining the bottom three tax brackets.  The tax rate for the new configuration is 0%.  This means taxpayers with Ohio Taxable Nonbusiness income of $21,750 or less will pay $0 in Ohio income tax.

    • All Ohio income tax rates have been reduced by 4%. The top tax rate is now 4.797%.

    • There will be no adjustment for Ohio’s personal and dependent exemption amounts for 2019.  The 2019 adjustments will be the same as tax year 2018.

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    IRS Announces Automatic Waiver for Estimated Tax Penalty

    Posted by Jonathan Ciccotelli on Aug 27, 2019 9:04:19 AM

    Topics: Tax Planning & Strategies

    On August 14, 2019, the IRS announced it would waive estimated tax penalties for eligible 2018 taxpayers.  This will effect around 400,000 tax filers who have already filed their 2018 federal tax return according to the IRS.

    If you have already filed your 2018 federal tax return and are eligible for the waiver, there is no need to contact the IRS or apply for the waiver.  The waiver will automatically be applied to your tax account by the IRS. 

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    Attention, Virtual Currency Owners: Pay Your Back Taxes - the IRS is Coming for You

    Posted by Jonathan Ciccotelli on Aug 22, 2019 4:15:10 PM

    Topics: Tax Planning & Strategies

    Taxpayers who own cryptocurrency should pay close attention to the IRS’s recent announcement. In July, the department announced they will soon crack down on taxpayers who fail to report their virtual currency transactions. Past activity will not be ignored. In this announcement, IRS Commissioner Chuck Rettig encourages taxpayers to meet their past tax obligations by amending prior returns and paying back taxes. 

    IRS Efforts

    Last month, the IRS sent over 10,000 educational letters that explain what transactions are taxable, when taxpayers should report their transactions, and how taxpayers can remedy past reporting oversights. The IRS has a history of helping taxpayers understand the ins and outs of the tax law, so these educational letters come as no surprise. In 2014, the department released a taxpayer notice explaining how virtual currency should be reported and how it will be taxed. Last year, they unveiled a Virtual Currency Compliance campaign that deployed training resources to the public and collected taxpayer feedback. And most recently, they announced that official guidance on the taxability of cryptocurrency transactions is forthcoming. Although the IRS’s chief concern is enforcement, taxpayer education is high on their priority list.

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    Ohio will keep the Business Income deduction (BID) at $250,000 and maintain the 3% flat rate cap in Budget bill

    Posted by Meaden & Moore on Jul 23, 2019 10:12:35 AM

    Topics: Tax Planning & Strategies

    On July 16, the Ohio House and Senate conference committee on Am. Sub. HB 166 voted to keep the Business Income Deduction (BID) at $250,000 and to maintain the 3% flat rate cap on income above it. Legislators were convinced to avoid tying the BID exclusions to the federal 199A law regarding the Qualified Business Income Deduction.

    The provision was previously mentioned as an option that would have impacted a broad array of specified service trades and businesses (SSTB). The House, Senate and DeWine Administration in reaching a compromise eliminated the BID for lawyers and lobbyists – two professions which became the focal point of BID concerns by some legislators. Read More

    Congress Acts To Reform the IRS

    Posted by Jonathan Ciccotelli on Jun 25, 2019 10:01:09 AM

    Topics: Tax Planning & Strategies

    The U.S. Senate has passed, and President Trump is expected to sign into law, a broad package of reforms aimed at the IRS. Among other things, the Taxpayer First Act contains several new protections for taxpayers, along with provisions intended to improve the IRS’s customer service.  

    Stronger safeguards against identity theft

    Several of the bill’s provisions address tax-related identity theft. For example, the bill generally requires the IRS to notify a taxpayer as soon as practicable when it suspects or confirms an unauthorized use of the individual’s identity. The IRS also must:

    • Provide the taxpayer instructions on how to file a report with law enforcement on the unauthorized use,

    • Identify any steps the individual should take to permit law enforcement to access his or her personal information during the investigation,
    • Provide information regarding the actions the taxpayer can take to protect him- or herself from harm, and
    • Offer identity protection measures, such as the use of an “identity protection personal identification number” (IP PIN).
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    Tax Reform Opens the Door for Nonresident Alien Investment in S Corporations

    Posted by Jonathan Ciccotelli on Jun 13, 2019 9:09:09 AM

    Topics: Tax Planning & Strategies

    A lesser-known provision of tax reform opens the door for small business owners to potentially tap into a new source of capital.

    Enacted in late 2017, the Tax Cuts and Job Act has received plenty of attention for the numerous and significant ways it alters corporate and individual tax liability. Some of its provisions, however, are still not fully leveraged or recognized as the business community continues to adapt to the enormous, complex tax law.

    One such provision is a change in the rules governing ownership in S corporations, a common organizational structure for many small businesses. The TCJA loosened some of the restrictions that have typically been associated with S corporation ownership, especially with respect to non-U.S. ownership.

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    IRS Announces Additional Guidance on Company Cars

    Posted by Jonathan Ciccotelli on Jun 4, 2019 1:35:05 PM

    Topics: Tax Planning & Strategies

    The IRS has updated the inflation-adjusted “luxury automobile” limits on certain deductions taxpayers can take for passenger automobiles — including light trucks and vans — used in their businesses. Revenue Procedure 2019-26 includes different limits for purchased automobiles that are and aren’t eligible for bonus first-year depreciation, as well as for leased automobiles.   

    The role of the TCJA

    The Tax Cuts and Jobs Act (TCJA) amended Internal Revenue Code (IRC) Section 168(k) to extend and modify bonus depreciation for qualified property purchased after September 27, 2017, and before January 1, 2023, including business vehicles. Businesses can expense 100% of the cost of such property (both new and used, subject to certain conditions) in the year the property is placed in service.

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    Personal Use of Employer-Provided Vehicles Updated Rules by the IRS

    Posted by Jonathan Ciccotelli on May 29, 2019 8:50:37 AM

    Topics: Tax Planning & Strategies

    The IRS recently announced the inflation-adjusted maximum value of an employer-provided vehicle under the vehicle cents-per-mile rule and the fleet-average value rule. Employers can use the rules to value an employee’s personal use of such a vehicle for income and employment tax purposes.

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    Ohio Proposes Tax Changes in Budget Bill

    Posted by Jonathan Ciccotelli on May 24, 2019 10:25:08 AM

    Topics: Tax Planning & Strategies

    The Ohio Biennial Budget Bill (House Bill 166) passed the Ohio House by a vote of 85-9 and has been moved to the Ohio Senate for debate. This bill contains a number of tax law changes that will impact not only Ohio residents, but some businesses may find themselves subject to sales tax nexus with Ohio when previously they were not.  The changes are proposed to be applied retroactively to taxable years beginning on or after January 1, 2019.  

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    Thoughtful Charitable Planning Can Maximize Tax Savings Under the TCJA

    Posted by Karen McCarthy on Apr 16, 2019 2:39:12 PM

    Topics: Tax Planning & Strategies

    The amount you donate to charity can make an impact on the organizations you support while providing relief from federal income tax. Now that we have had a full year to review the impact of the Tax Cuts and Jobs Act (TCJA), charitable giving can still play a key role in your tax planning.

    The TCJA continues to provide tax benefits for charitable giving for those taxpayers who are able to itemize their deductions. In fact, charitable contributions are one of the few deductions that were enhanced under the Act, which increased the AGI limitation on cash contributions from 50% to 60%. The 30% limitation on contributions of appreciated assets still applies and contributions exceeding the limits may be carried over for up to five years. 

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