TAX NEWS & ALERTS

Tax News & Alerts

  • Not-for-Profit Tax-Exempt Status

    Not-for-Profit Tax-Exempt Status

    One of the worst things that can happen to a not-for-profit organization is to have its tax-exempt status revoked. Among other consequences, the nonprofit may lose credibility with supporters and the public, and donors will no longer be able to make tax-exempt contributions. Although loss of exempt status isn’t common, certain activities can increase your risk significantly.  Read More »
  • Overtime Rules

    Overtime Rules

    The U.S. Department of Labor (DOL) has released the finalized rule on overtime exemptions for white-collar workers under the Fair Labor Standards Act. The rule updates the standard salary levels for the first time since 2004. While it is expected to expand the pool of nonexempt workers by more than 1 million, it’s also more favorable to employers than a rule proposed by the Obama administration in 2016.  Read More »
  • Unemployment Tax Costs

    Unemployment Tax Costs

    As an employer, you must pay federal unemployment tax (FUTA) on amounts up to $7,000 paid to each employee as wages during the calendar year. The rate of tax imposed is 6% but can be reduced by a credit (described below). Most employers end up paying an effective FUTA tax rate of 0.6%. An employer taxed at a 6% rate would pay FUTA tax of $420 for each employee who earned at least $7,000 per year, while an employer taxed at 0.6% pays $42.  Read More »
  • Ohio Tax Update

    Ohio Tax Update

    This is an update to an article posted earlier this summer regarding the signing of Ohio’s state budget bill, which passed on July 18, 2019. Read on to get an overview of the elements which were updated in October 2019.  Read More »
  • Divorce Tax Issues

    Divorce Tax Issues

    In addition to the difficult personal issues that divorce entails, several divorce tax issues need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are properly made. Here are four divorce tax issues to understand if you are in the process of getting a divorce. Here are just some of the divorce tax issues you may have to deal with if you’re getting a divorce. In addition, you must decide how to file your tax return (single, married filing jointly, married filing separately or head of household).Read More »
  • Bonus Depreciation Guidance

    Bonus Depreciation Guidance

    The IRS has released final regulations and another round of proposed regs for the first-year 100% bonus depreciation deduction. The Tax Cuts and Jobs Act (TCJA) expanded the deduction to 100% if the qualified property is placed in service through 2022, with the amount dropping each subsequent year by 20%, until it sunsets in 2027. (The phaseout reductions are delayed a year for certain property with longer production periods.)  Read More »
  • Divorce Decree

    Divorce Decree

    Divorcing or separating taxpayers need to be aware of how the breakup of a marriage may affect their 2019 tax returns. The tax treatment of alimony and separation payments changed for divorce and separation agreements that occurred (or, in some cases, were modified) after 2018.  Read More »
  • Nanny Tax

    Nanny Tax

    You may have heard of the “nanny tax.” But even if you don’t employ a nanny, it may apply to you. Hiring a housekeeper, gardener or other household employee (who isn’t an independent contractor) may make you liable for federal income and other taxes. You may also have state tax obligations.  Read More »
  • Roth IRA Conversion

    Roth IRA Conversion

    Roth IRAs offer significant estate planning and financial benefits. If you have a substantial balance in a traditional IRA and are considering converting it to a Roth IRA, there may be no better time than now. The Tax Cuts and Jobs Act (TCJA) reduced individual income tax rates through 2025. By making the conversion now, the TCJA enhances the benefits of a Roth IRA.  Read More »
  • Mergers and Acquisitions (M&A)

    Mergers and Acquisitions (M&A)

    If you’re considering buying or selling a business — or you’re in the process of a merger or acquisition — it’s important that both parties report the M&A transaction to the IRS in the same way. Otherwise, you may increase your chances of being audited.  Read More »
  • Home Equity Loan Rules

    Home Equity Loan Rules

    Passage of the Tax Cuts and Jobs Act (TCJA) in December 2017 has led to confusion over some of the changes to longstanding deductions, including the deduction for interest on home equity loans. In response, the IRS has issued a statement clarifying that the interest on home equity loans, home equity lines of credit and second mortgages will, in many cases, remain deductible under the TCJA — regardless of how the loan is labeled.  Read More »
  • ACA PCORI Fee Due By July 31, 2019

    ACA PCORI Fee Due By July 31, 2019

    The PCORI (Patient Centered Outcomes Research Institute) Fee filing deadline of July 31, 2019 is fast approaching.  This fee was implemented as part of the Affordable Care Act and applies to an employer’s health plan. The PCORI fee is temporary and only applies for plan years beginning after September 30, 2012 and ending before October 1, 2019.Read More »
  • Tax Payer First Act

    Tax Payer First Act

    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.  Read More »
  • Payroll Tax Penalty

    Payroll Tax Penalty

    If federal income tax and employment taxes (including Social Security) are withheld from employees’ paychecks and not handed over to the IRS, a harsh payroll tax penalty can be imposed. To make matters worse, the penalty can be assessed personally against a “responsible individual.”Read More »
  • IRS Audit Statistics

    IRS Audit Statistics

    The IRS just released its audit statistics for the 2018 fiscal year, and fewer taxpayers had their returns examined as compared with prior years. However, even though a small percentage of tax returns are being chosen for audit these days, that will be little consolation if yours is one of them. Latest statistics Overall, just 0.59% of individual tax returns were audited in 2018, as compared with 0.62% in 2017. This was the lowest percentage of audits conducted since 2002.  Read More »
  • Business Tax Implications of Divorce

    Business Tax Implications of Divorce

    If you’re getting a divorce, you know it’s a highly stressful time. But if you’re a business owner, tax issues can complicate matters even more. Your business ownership interest is one of your biggest personal assets and your marital property will include all or part of it.  Read More »
  • Gift Tax Return

    Gift Tax Return

    Did you make large gifts to your children, grandchildren or other heirs last year? If so, it’s important to determine whether you’re required to file a 2018 gift tax return — or whether filing one would be beneficial even if it isn’t required.Read More »
  • Pet Trusts and Your Will 

    Pet Trusts and Your Will 

    An unexpected outcome of the recent death of designer Karl Lagerfeld is that the topic of estate planning for pets has been highlighted. Lagerfeld’s beloved cat, Choupette, played a major role in his brand. The feline was the subject of a coffee table book and has a large Instagram following. Before his death, Lagerfeld publicly expressed his wishes to have his ashes, and those of his cat if she had died before him, to be scattered with those of his mother’s. It’s unknown if Lagerfeld accounted for his beloved Choupette in his estate plan, but one vehicle he could have used to do so is a pet trust.   Read More »
  • D&O Insurance

    D&O Insurance

    Directors and officers (D&O) liability insurance enables board members to make decisions without fear that they’ll be personally responsible for any related litigation costs. Such coverage is common in the business world, but fewer not-for-profits carry it. Nonprofits may assume that their charitable mission and the good intentions of volunteer board members protect them from litigation. These assumptions can be wrong.  Read More »
  • Vehicle Expense Deductions

    Vehicle Expense Deductions

    It’s not just businesses that can deduct vehicle-related expenses. Individuals also can deduct them in certain circumstances. Unfortunately, the Tax Cuts and Jobs Act (TCJA) might reduce your deduction compared to what you claimed on your 2017 return.  For 2017, miles driven for business, moving, medical and charitable purposes were potentially deductible. For 2018 through 2025, business and moving miles are deductible only in much more limited circumstances. TCJA changes could also affect your tax benefit from medical and charitable miles.   Read More »
  • Are Your Employees Ignoring Their 401(k)s?

    Are Your Employees Ignoring Their 401(k)s?

    For many businesses, offering employees a 401(k) plan is no longer an option — it’s a competitive necessity. But employees often grow so accustomed to having a 401(k) that they don’t pay much attention to it. It’s in your best interest as a business owner to buck this trend. Keeping your employees engaged with their 401(k)s will increase the likelihood that they’ll appreciate this benefit and get the most from it. In turn, they’ll value you more as an employer, which can pay dividends in productivity and retention.  Read More »
  • Your Charitable Donations And Tax Deductions

    Your Charitable Donations And Tax Deductions

    There’s Still time to get substantiation for 2018 donations - If you’re like many Americans, letters from your favorite charities have been appearing in your mailbox in recent weeks acknowledging your 2018 year-end donations. But what happens if you haven’t received such a letter — can you still claim an itemized deduction for the gift on your 2018 income tax return? It depends.  Read More »
  • QBI Deductions

    QBI Deductions

    As part of the recently issued Sec. 199A QBI deduction regulations, the IRS issued guidance for certain real estate businesses. It allows individuals and entities who own rental real estate directly or through a disregarded entity to treat a rental real estate enterprise as a trade or business (for purposes of the QBI deduction) if certain requirements are met.  Read More »
  • Tax Extenders

    Tax Extenders

    No action is likely to be taken on tax “extenders” for now. Extenders are tax provisions that the U.S. Congress periodically considers for renewal. Prior to the end of the 115th Congress, there was guarded optimism that a bill would be passed before filing season began to extend provisions that expired.  Read More »
  • 100 Percent Depreciation Deduction

    100 Percent Depreciation Deduction

    Proposed Rules Address 100-Percent Depreciation Deduction - Proposed regulations address the new 100-percent depreciation deduction that allows businesses to write off most depreciable business assets in the year they are placed in service. Background The Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97) amended Code Sec. 168(k) to increase the percentage of the additional first year depreciation deduction from 50 percent to 100 percent for property acquired after September 27, 2017. It also expanded the property eligible for the additional first year depreciation to include certain used depreciable property and certain film, television, or live theatrical productions.Read More »
  • SALT Credit Deduction Limit

    SALT Credit Deduction Limit

    Proposed Regs. Limit Charitable Contributions Made to Avoid SALT Credit Deduction Limit An individual, estate, and trust generally must reduce the amount of any charitable contribution deduction by the amount of any state and local tax credit, or SALT credit, he or she receives or expects to the receive for the transfer under proposed regulations. The rules will blunt attempts by state and local governments to get around the new SALT credit deduction dollar limits.  Read More »
  • New Moving Expenses Regulations

    New Moving Expenses Regulations

    Moving Expense Reimbursements Incurred Before 2018 Are Excluded Employer payments or reimbursements in 2018 for employees’ moving expenses incurred prior to 2018 are excluded from the employee’s wages for income and employment tax purposes. The Tax Cuts and Jobs Act of 2017 ( P.L. 115-97) suspended the exclusion from income for moving expenses reimbursed or paid by an employer for most employees starting in 2018, making these amounts taxable, except for amounts for active-duty members of the U.S. Armed Forces whose moves relate to a military-ordered permanent change of station.  Read More »
  • Due Diligence Requirements for Tax Preparers

    Due Diligence Requirements for Tax Preparers

    Due Diligence Requirements for Tax Preparers- The IRS has proposed amendments to the tax preparer due diligence regulations to reflect a recent law change. The Tax Cuts and Jobs Act ( P.L. 115-97) expanded the scope of the due diligence penalty to apply to tax preparers who fail to use due diligence when determining a client’s head of household status.  Read More »
  • 199A Pass Through Deduction

    199A Pass Through Deduction

    The IRS has released long-awaited guidance on new Code Sec. 199A, commonly known as the "pass-through deduction" or the "qualified business income deduction." Taxpayers can rely on the proposed regulations and a proposed revenue procedure until they are issued as final. Code Sec. 199A allows business owners to deduct up to 20 percent of their qualified business income (QBI) from sole proprietorships, partnerships, trusts, and S corporations. The deduction is one of the most high-profile pieces of the Tax Cuts and Jobs Act (P.L. 115-97).  Read More »
  • Pass-Through Deduction

    Pass-Through Deduction

    The IRS’s proposed pass-through deduction regulations are generating mixed reactions on Capitol Hill. The 184-page proposed regulations, REG-107892-18, aim to clarify certain complexities of the new, yet temporary, Code Sec. 199A deduction of up to 20 percent of income for pass-through entities. The new deduction was enacted through 2025 under the Tax Cuts and Jobs Act (TCJA), ( P.L. 115-97). The pass-through deduction has remained one of the most controversial provisions of last year’s tax reform.  Read More »