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In Notice 2018-28, the IRS answered important questions about the new business interest limit in Sec. 163(j), as amended by P.L. 115-97, known as the Tax Cuts and Jobs Act (TCJA), and asked for general comments on regulations it plans to issue. Under amended Sec. 163(j), the deduction for business interest is limited to the …
Continue reading IRS issues first guidance on new business interest limitation
EXECUTIVE SUMMARY The deduction for an individual's personal casualty loss of property not connected with (1) a trade or business or (2) a transaction entered into for profit arising after Dec. 31, 2017, and before Jan. 1, 2026, has been eliminated, with several exceptions. Business taxpayers may deduct amounts paid for repairs and maintenance to …
Continue reading Casualty losses and expenditures under Sec. 162 or 165
During the pendency of a divorce, a taxpayer was ordered by a family court to transfer funds to an individual retirement account (IRA) in his spouse's name. Where the taxpayer received a distribution of funds from his IRAs and then wrote checks to the spouse, the exclusion from taxation available under Sec. 408(d)(6) was inapplicable, …
Continue reading IRA distribution to pay spousal support is taxable
As tax practitioners prepare to counsel clients about the loss of dependency exemptions on 2018 tax returns, there is good news to offer in the form of the enhanced child tax credit. The legislation known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, doubled the credit amount, increased the refundable portion, and expanded …
Continue reading Child tax credit now higher, more widely available
Entertainment includes any activity generally considered to provide entertainment, amusement, or recreation (Regs. Sec. 1.274-2(b)(1)). Meal and entertainment expenses incurred by a taxpayer to entertain a client, customer, employee, or other business associate are deductible only if the expenses satisfy the following strict requirements imposed by the Code: Ordinary and necessary: Meal or entertainment expenses …
Continue reading Proving a Business Connection for Meals and Entertainment
The IRS provided information to taxpayers about changes in the use of standard mileage rates and increased depreciation limits for passenger automobiles as a result of P.L. 115-97, known as the Tax Cuts and Jobs Act, which made amendments to Secs. 67 and 217. In Notice 2018-42, the IRS modified Notice 2018-03, which provided the …
Continue reading Standard mileage rates, depreciation amounts updated
To give grantors and contributors to tax-exempt organizations more easily accessible guidance on deductibility and reliance issues, the IRS has combined into one revenue procedure previous scattered pieces of guidance dating back to 1981 (Rev. Proc. 2018-32). The new revenue procedure tells grantors and contributors when they can rely on a listing of an organization …
The IRS announced that it plans to issue regulations in response to state legislation intended to help taxpayers avoid the $10,000 limitation on the deduction for state and local taxes under Sec. 164 as amended by P.L. 115-97, known as the Tax Cuts and Jobs Act (Notice 2018-54). That limitation applies to individual taxpayers for …
Continue reading IRS to clarify rules on payments in lieu of state and local taxes
Running a business can be expensive. Everything comes at a cost, from keeping the lights on to buying inventory. Luckily, you may be able to deduct some of these business expenses to reduce your taxes. Even super small businesses with no or few employees can benefit from these deductions. Note: If you plan to claim …
Continue reading 11 Business Deductions That Even the Smallest Businesses Can Claim
The IRS on Thursday issued a warning to employers and small businesses to beware of growing attempts by cybercriminals to target businesses to obtain the business’s and employees’ information. These criminals then use the stolen information to open credit card accounts and file fraudulent tax returns for “bogus refunds.” In the past two years, the …
Continue reading Small businesses should guard against tax-return identity theft
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