Bloomberg Tax and Thomson Reuters have released their 2019 projected inflation adjustments for a variety of tax-related items that are subject to change each year, but particularly after last year’s big tax overhaul. Typically, items such as tax brackets and deduction amounts have been based on the Consumer Price Index for All Consumers, also known as CPI-U. But the passage …
The IRS issued proposed regulations on Wednesday regarding the qualified trade or business income deduction under Sec. 199A, which was enacted by P.L. 115-97, the law known as the Tax Cuts and Jobs Act (TCJA) (REG-107892-18). At the same time, it issued Notice 2018-64, which provides guidance on how to compute W-2 wages for purposes of the deduction, along with FAQs. The …
Interest rates are staying put – at least when it comes to the Internal Revenue Service (IRS). The IRS has announced in Revenue Ruling 2018-18 that interest rates will remain the same for the third calendar quarter (beginning July 1, 2018) as they did for the last quarter. The rates for the third quarter for individuals will be: 5% for …
Just because a creditor thinks a debt has become worthless doesn’t mean they can deduct it, according to a recent Tax Court ruling. A debt that becomes wholly worthless within the taxable year is deductible as a business bad debt. To deduct a business bad debt, the taxpayer must show the existence of a valid debtor-creditor relationship, that the debt …
What was known as the Tax Cuts and Jobs Act has raised the stakes on the issue of whether someone is an employee or an independent contractor. Unreimbursed employee business expense will no longer be deductible at all and new Section 199A may allow a 20% deduction for independent contractors. This all makes the partial taxpayer victory in the Judge …
The IRS issued a draft version of the 2019 Form W-4, Employee’s Withholding Allowance Certificate, and instructions for the form, in an attempt to further simplify the task of determining income tax withholding for individual taxpayers after the passage of P.L. 115-97, known as the Tax Cuts and Jobs Act of 2017 (TCJA). The TCJA eliminated personal exemptions, increased the …
The Internal Revenue Service’s Chief Counsel has issued a memorandum providing advice on unreported tip income, with the caveat that the advice cannot be used or cited as precedent. One of the issues that arose was whether cash amounts distributed to individuals from “tip boxes” are properly classified as tips under the Tax Code and subject to FICA tax. The …
Now that the effects of last year’s tax reform bill are being felt, the proposals to reform the reform (say that quickly three times) keep rolling in. Last month, Sen. Bob Casey (D-PA) put forth a bill to reinstate unreimbursed job expenses. This week, Rep. Richard Nolan (D-MN) introduced H. R. 5662, also known as the Volunteer Driver Tax Appreciation Act …
In Notice 2018-28, the IRS answered a number of 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 sum of (1) …
It’s the 11th hour and you’re slowly, but surely getting those 2017 taxes done. As you enter those W-2s and W-9s into your favorite tax prep software, you see it out of the corner of your eye: Your once destined-for-vacation tax refund is now squarely in the dreaded “taxes due” column. Suddenly, with just hours to spare, you find yourself …
