Professional Accounting Blog

    Accounting For Your Prosperity

    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).
    Read More

    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.

    Read More

    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.

    Read More

    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.

    Read More

    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.  

    Read More

    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. 

    Read More

    Uncertainty Looms Over Some Federal Income Tax Provisions

    Posted by Jonathan Ciccotelli on Apr 16, 2019 11:21:17 AM

    Topics: Tax Planning & Strategies

    Congress has yet to tackle several outstanding uncertainties frustrating both businesses and individual taxpayers. The Tax Cuts and Jobs Act (TCJA), for example, contains several “glitches” requiring legislative fixes. Congress also has neglected to pass the traditional “extenders” legislation that retroactively extend certain tax relief provisions that expired at the end of an earlier year, in this case 2017.  

    TCJA glitches

    The sprawling TCJA signed into law in late 2017 contains some inadvertent glitches that range from a lack of clarity to significant drafting errors. In some cases the glitches may produce unintended and costly consequences. Here are examples of two glitches that still need to be addressed and one that has been addressed recently:

    The “retail” glitch. This prevents retailers, restaurants and other businesses from enjoying 100% bonus depreciation on certain assets. Before the TCJA’s enactment, qualified retail improvement property, qualified restaurant property and qualified leasehold improvement property were depreciated over 15 years under the modified accelerated cost recovery system (MACRS) and over 39 years under the alternative depreciation system (ADS).

    The TCJA classifies all of these property types as qualified improvement property (QIP). QIP generally is defined as any improvement to the interior of a nonresidential real property that’s placed in service after the building was placed in service.

    Congress intended QIP that is placed in service after 2017 to have a 15-year MACRS recovery period and a 20-year recovery under the ADS. Because 15-year property is eligible for bonus depreciation, Congress also intended QIP to be eligible for that break.

    Read More

    Guidance on Claiming 20% Rental Deduction

    Posted by Peter DeMarco on Apr 3, 2019 11:13:16 AM

    Topics: Tax Planning & Strategies

    The Internal Revenue Service recently offered welcome news to some business owners still sorting out the impact of the Tax Cuts and Jobs Act. 

    One of the key provisions of the tax reform law passed more than a year ago is a 20% deduction of qualified business income from each of a taxpayer’s qualified trades or businesses when operated as a pass-through entity, like a partnership, S corporation or sole proprietorship. As exciting as the deduction sounds, it also produced plenty of questions that the IRS needed to answer to enable people to understand how it would be applied in practice.

    Read More

    DOL Proposes Updated Overtime Rule

    Posted by Jonathan Ciccotelli on Mar 27, 2019 9:23:52 AM

    Topics: Tax Planning & Strategies

    The Trump administration has released its long-awaited proposed rule to update the overtime exemptions for so-called white-collar workers under the Fair Labor Standards Act. The rule increases the minimum weekly standard salary level for both regular workers and highly compensated employees (HCEs). It also increases the total annual compensation requirement for HCEs that’s required to qualify them as exempt. In addition, it retains the often confusing “duties test.”  

    The Trump administration rule generally is more favorable to employers than the Obama administration’s 2016 rule, which a federal district court judge in Texas halted before it could take effect. While the latter was expected to make 4.1 million salaried workers newly eligible for overtime (absent some intervening action by their employers), the U.S. Department of Labor (DOL) predicts that the newly proposed rule will make 1.3 million currently exempt employees nonexempt. The DOL estimates the direct costs for employers under the proposed rule will ring in at $224 million less per year than under the 2016 rule. (It’s unclear whether these figures take into account payroll tax obligations.)

    Read More

    IRS Provides QBI Deduction Guidance

    Posted by Jonathan Ciccotelli on Jan 28, 2019 11:32:14 AM

    Topics: Tax Planning & Strategies

    When President Trump signed into law the Tax Cuts and Jobs Act (TCJA) in December 2017, much was made of the dramatic cut in corporate tax rates. But the TCJA also includes a generous deduction for smaller businesses that operate as pass-through entities, with income that is “passed through” to owners and taxed as individual income.

    The IRS issued proposed regulations for the qualified business income (QBI), or Section 199A, deduction in August 2018. Now, it has released final regulations and additional guidance, just before the first tax season in which taxpayers can claim the deduction. Among other things, the guidance provides clarity on who qualifies for the QBI deduction and how to calculate the deduction amount.

    Read More

    Subscribe to Email Updates

    New Call-to-action
    New Call-to-action
    New Call-to-action
    New Call-to-action