News & Articles

IRS Issues Final QBI Deduction Regulations

Posted on Wed, Feb 13, 2019

The IRS has issued final regulations on determining allowable deductions based on qualified business income (QBI) from pass-through entities. This break is available only through 2025, unless it's extended by future legislation.

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Tags: Qualified Business Income (QBI), IRS, Pass-Through Entities

How Much Does the IRS Let Delinquent Taxpayers Live On Each Month?

Posted on Wed, Oct 10, 2018

The IRS uses "Collection Financial Standards" to help determine a taxpayer's ability to pay a delinquent tax liability. Allowable living expenses include those that meet the test of being necessary to provide for a taxpayer's (and his or her family's) health and welfare, as well as his or her ability to produce income.

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Tags: Taxes, IRS, Healthcare

QBI Deduction Provides Tax Break to Pass-Through Entity Owners

Posted on Fri, Aug 24, 2018

The IRS recently issued proposed reliance regulations to help clarify the new qualified business income (QBI) deduction that was introduced as part of the Tax Cuts and Jobs Act. This guidance is complex and hundreds of pages long. As part of the proposed regs, the IRS explained that, if certain requirements are met, individuals, estates and trusts (all referred to as "individuals" by the proposed regs) that own interests in more than one qualifying trade or business can (but aren't required to) aggregate them, by treating them as a single trade or business.

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Tags: Tax Cuts and Jobs Act (TCJA), IRS, Qualified Business Income (QBI), Business Owner

Ensure You Qualify for Charitable Donation Deductions

Posted on Thu, Jul 12, 2018

Giving to charity can provide you with a warm feeling as well as a nice tax break. But you've got to itemize deductions on your tax return. And, like most tax breaks, charitable deductions come with a number of rules you must follow to actually claim the write-off. Here are the details.

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Tags: Charitable Donations, IRS, Charitable Giving

Handle with Care: The Nanny Tax Rules

Posted on Wed, Nov 22, 2017

When you hire a nanny, housekeeper or other domestic worker, pay close attention to the tax rules.

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Tags: Taxes, Independent Contractor, IRS, Social Security

IRS Guidance on Leave-Sharing Programs to Help Hurricane Harvey Victims

Posted on Mon, Sep 11, 2017

The IRS recently announced special tax relief for leave-based donation programs set up by employers to assist victims of Hurricane Harvey and Tropical Storm Harvey.

Basics of Employer Programs

Under a leave-based donation program, an employer can allow its employees to forgo their vacation, sick, or personal time off in exchange for cash payments made by the employer to charitable organizations. Under IRS regulations, leave-based charitable donations are ordinarily included in the donating employee's income. In addition, the opportunity to elect such contributions raises the concern that eligible employees might be taxed on income that could have been donated because the ability to make the contribution triggers "constructive receipt."

IRS Relief

The new IRS guidance addresses both concerns:

  • Cash payments that employers make to qualified tax-exempt organizations in exchange for vacation, sick, or personal leave that their employees elect to give up won't constitute income to the employees if the payments are made before January 1, 2019, for the relief of victims of Hurricane Harvey or Tropical Storm Harvey.

    Such payments don't need to be included in Box 1, 3, or 5 of the employee's Form W-2.
  • The opportunity to make a leave donation won't result in constructive receipt of income. Employees who participate in these programs can't deduct the value of the donated leave on their income tax returns. Reason: Such deductions would involve "double-dipping" because the donated time off already would have been excluded from their incomes.

    Employers cannot claim a charitable deduction for the value of the forgone leave. However, they will be permitted to deduct the contributions as trade or business expenses without regard to the charitable contribution restrictions under the tax code.

This guidance closely resembles the relief for leave-based donation programs that the IRS has issued after other recent disasters, including last year's severe storms and flooding in Louisiana and Hurricane Matthew.

If you need more information about leave-based donation programs, consult with your EHTC Tax Advisor or employee benefits advisor.

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Tags: Charitable Donations, IRS, Employers

IRS: Swap Your Vacation Home in Tax-Deferred Exchange

Posted on Mon, Aug 28, 2017

Many taxpayers own vacation homes that they've rented out and also used as their personal residences. Can one of these homes be traded for another vacation home in a tax-deferred Section 1031 exchange? According to the IRS, the answer is "yes" under the right circumstances. The IRS has even issued guidelines for how to do it. (IRS Revenue Procedure 2008-16)

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Tags: Vacation Home, Section 1031 Exchange, IRS, Safe-Harbor Guidelines

Bring Home a Tax Credit for Adoption

Posted on Wed, Aug 23, 2017

When you adopt a child, you could bring home more than a bundle of joy. You may also be in line for a valuable tax credit.

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Tags: Tax Credit, IRS, Child expenses, Tax Credits

Revenue Recognition for Contracts: Changes Coming Soon

Posted on Thu, Aug 10, 2017

Revenue is the top line of your company's income statement. So it tends to receive a lot of attention from investors, lenders and other stakeholders. Why? Changes in revenue can tell whether your company is growing or declining. Moreover, changes in the composition of revenue can provide insight into your strategic plans.

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Tags: IRS, Business, Business Finance, Cash Flow Statement

How Much Does the IRS Let Delinquent Taxpayers Live On?

Posted on Mon, Jul 31, 2017

The IRS uses "Collection Financial Standards" to help determine a taxpayer's ability to pay a delinquent tax liability. Allowable living expenses include those that meet the test of being necessary to provide for a taxpayer's (and his or her family's) health and welfare, as well as his or her ability to produce income.

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Tags: IRS, Federal Taxes, Bill Collecting, Taxpayer