January 21st, 2019 by Kim Chen
: Under IRC Sec. 965, which was added by the Tax Cuts and Jobs Act (TCJA), U.S. shareholders of a specified foreign corporation are subject to a deemed repatriation tax. This is accomplished by increasing the foreign corporation’s Subpart F income by the greater of (1) the accumulated post-1986 earnings and profits of the corporation […]
January 18th, 2019 by Kim Chen
The IRS has announced that it will waive the Section 6654 penalty for the underpayment of estimated income tax for certain individuals who would otherwise be required to make estimated payments on or before 1/15/19. The waiver is limited to individuals whose total withholding and estimated tax payments equal or exceed 85% of the tax […]
December 22nd, 2018 by Kim Chen
Thanks to the Tax Cuts and Jobs Act (TCJA), accrual method taxpayers are subject to the Applicable Financial Statement (AFS) conformity rule for tax years beginning after 2017. This rule states that the all events test for recognizing income is met no later than when the income is recognized on the taxpayer’s AFS or other […]
December 21st, 2018 by Kim Chen
Prepaying property taxes has been a popular year-end tax-planning strategy. But does it still make sense? For many, particularly those in high-tax states, it doesn’t. The TCJA made two changes that affect this strategy: 1) nearly doubling the standard deduction, so fewer taxpayers will itemize, and 2) putting a $10,000 cap on state and local […]
December 21st, 2018 by Kim Chen
Converting a traditional IRA to a Roth IRA can provide tax-free growth and tax-free withdrawals in retirement. But what if you convert your traditional IRA — subject to income taxes on all earnings and deductible contributions — and then discover you would have been better off if you hadn’t converted it? Before the Tax Cuts […]
December 20th, 2018 by Kim Chen
Notice 2018-80, 2018-42 IRB In a Notice, IRS has announced that it intends to issue proposed regs providing that market discount is not includible in income under Code Sec. 451(b), as amended by the Tax Cuts and Jobs Act (TCJA; P.L. 115-97, 12/22/2017).Code Sec. 451(b) provides that the all events test is met with respect […]
December 17th, 2018 by Kim Chen
The Draft Instructions alerted taxpayers to some of the major changes under the TCJA affecting returns filed for 2018. Change in tax rates. For 2018, most tax rates have been reduced. The 2018 tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Standard deduction amount. For 2018, the standard deduction amount has been […]
December 12th, 2018 by Kim Chen
Information Letter 2018-0030 IRS has issued an information letter in which it provides that a state tax credit program, to which business taxpayers can make payments in exchange for credits against various business taxes, is not impacted by the recent proposed regs targeting state and local tax (SALT) limitation workarounds. Background—business expense deduction. Generally, a […]
December 4th, 2018 by Kim Chen
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that’s helpful and appropriate for your business. The IRS sometimes challenges deductions claimed for certain types of business expenses. In doing so, an […]
November 20th, 2018 by Kim Chen
The Tax Cuts and Jobs Act (TCJA) establishes a new federal income tax credit for employers that provide qualifying paid family and medical leave benefits to their employees. This credit is only available for two employer tax years — those beginning between January 1, 2018 and December 31, 2019 — unless Congress extends the deal. […]
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