The Protecting Americans from Tax Hikes (PATH) Act of 2015 made the research and development tax credit permanent, and presented a new savings opportunity to businesses with $50 million or less in gross receipts by allowing these entities to offset the R&D credit against the alternative minimum tax. The changes even allow certain small businesses under $5 million in gross receipts to offset the R&D tax credit against payroll taxes.
Employees traveling to multiple states for work during the year may soon see some relief when filing taxes. Senate Democrats and Republicans have come to an agreement on a bill that would ease the filing process for these employees. The bill would simplify and standardize state income tax collection for traveling employees working out of state temporarily. The bill would also provide relief for employers who must comply with withholding and reporting requirements.
Due to the major changes from the Tax Cuts and Jobs Act, the Internal Revenue Service (IRS) is recommending that all taxpayers perform a “paycheck checkup” on their current withholdings. The IRS provides a withholding calculator application on their website to determine proper withholding amounts.
With the 2018 tax deadline rapidly approaching, taxpayers will face fraudulent attempts by scam artists using the April 15 deadline as a way to gain financial and personal information. These attempts are made through a wide range of elaborate schemes via a number of tactics - especially phone scams.
In 2018, the federal tax withholding tables changed because of lower individual tax rates in the Tax Cuts and Jobs Act. As a result, individuals received larger paychecks because of the lower rates. A downfall of this was individuals potentially not withholding enough taxes to cover their tax bill in April and being subject to underpayment penalties.
As tax season rages on, cyber criminals are targeting taxpayers with new scams. After a 60 percent jump in so-called phishing scams in 2018, the IRS is warning us to be extra vigilant this year. Hackers are using the advancements in technology to target taxpayers year-round but tax season is prime phishing season.
The Tax Cuts and Jobs Act is the biggest tax reform in 30 years and still a very new concept for Congress, the IRS and other regulatory bodies. The analysis and interpretations of each of the different areas of the new legislation are very much still evolving. Some of these areas are extremely complex.
On Oct. 4, 2018, New Jersey adopted several changes to the New Jersey Corporation Business Tax including requiring combined reporting for tax years ending on and after July 31, 2019. This requires companies that have common ownership and are engaged in a unitary business to file a combined New Jersey return if at least one of the entities is subject to New Jersey Corporation Business Tax.
The Tax Cuts and Jobs Act allows for a potential 20 percent tax deduction for qualified business income generated from pass-through entities for tax years beginning after Dec. 31, 2017 (IRC Sec. 199A). The deduction is only applicable to pass-through entities that conduct a trade or business. Therefore, under the original law, it was uncertain if rental real estate entities leasing to third parties would qualify for this deduction.
Qualified Opportunity Zones were established as part of tax reform, and they allow investors to defer or minimize tax on a capital gain by investing in a fund or zone investment. Assuming a taxpayer sells a stock and recognizes a $200,000 gain, investing that gain in a qualified investment within 180 days, coupled with a tax return election, will allow for deferral of the payment of tax until the earlier of the date the zone investment is sold or December 31, 2026.
Wednesday May 22 2019 | 4:30PM—6:30PM |
Scarab Club | 217 Farnsworth Street | Detroit, MI 48202