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 …
The Senate Finance Committee recently approved its version of the Tax Cuts and Jobs Act. The bill is now on it’s way to the full Senate for debate and a vote. The Finance committee spent over a week amending the bill, and the final version includes some changes beyond those included in the chairman’s mark released early in November The …
Originally released early in November, the Tax Cuts and Jobs Act ( H.R. 1) has now passed the House Ways and Means Committee 24 to 16, and with that vote will be sent to the full House. The bill as marked up by the committee contains many of the changes from the first iteration. Reportedly, some of these changes were …
On November 2nd House Republicans released their long awaited tax plan. The framework extends to many different areas of the tax code: two critical areas are tax deductions and credits. These reduce how much taxpayers owe, but they affect various income groups differently. Here’s How could the proposed changes to these policies affect your taxes. How Exemptions Worked in the …
