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News, Articles & Resources

Category: Tax Planning & Compliance

Final Regulations under Section 199A Create Safe Harbor for Rental Real Estate, Exclude Triple Net Leases

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On January 18, 2019, the Treasury Department and the Internal Revenue Service (IRS) issued final regulations under new Section 199A and three related pieces of guidance.  Created by the 2017 Tax Cuts and Jobs Act (TCJA), Section 199A allows eligible taxpayers (individuals, trusts and estates) to deduct up to twenty…

IRS Waives Penalties for Some Underpayments of Estimated Tax

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As a general rule, taxpayers are required to pay their federal taxes as they earn income.  To the extent these taxes are not withheld, a taxpayer must pay estimated income taxes on a quarterly basis. Internal Revenue Code (I.R.C.) § 6654 provides that, in the case of an individual taxpayer,…

Meals or Entertainment? IRS offers Guidance.

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The IRS gave notice it intends to publish proposed regulations clarifying when business meal expenses are nondeductible entertainment expenses and when they are 50 percent deductible expenses. It also provided guidance on the treatment of expenses for certain business meals. Taxpayers may rely on this guidance until the proposed regulations…

Section 199A Proposed Regulations Provide De Minimis Safe Harbor for Specified Service Businesses

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New proposed regulations under I.R.C. § 199A provide a de minimis exception for owners of passthrough entities which offer a mix of products and specified services. QBI Deduction and Specified Service Trade or Business Generally, I.R.C. § 199A provides a deduction to non-corporate taxpayers of up to twenty (20%) percent…

Proposed 199A Regulations Narrowly Interpret “Reputation or Skill” Clause for SSTBs

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In a welcome development for owners of passthrough businesses, new proposed regulations under I.R.C. § 199A include a very narrow interpretation of the “catch-all” clause defining specified service trades or businesses. QBI Deduction and Specified Service Trade or Business Generally, Section 199A provides a deduction to non-corporate taxpayers of up…

Credit Where Credit Is Due

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In Doherty v. Director, Div. of Taxation, the New Jersey Tax Court explained how to compute the resident tax credit. The taxpayers, New Jersey residents, were shareholders in an S corporation doing business in New Jersey and Pennsylvania. The shareholders were subject to tax in both states on the S…

Proposed Regulations Address Bonus Depreciation Issues for Certain Qualified Improvement Property

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On August 3, 2018, the Treasury Department issued Proposed Regulations regarding the additional first year depreciation deduction under Section 168(k) of the Internal Revenue Code. One change instituted under the Tax Cuts and Jobs Act, P.L. 115-97 (“TCJA”), was to eliminate the separate categories of qualified leasehold improvement, qualified restaurant,…

Return Preparer Regs to be Amended

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Proposed regulations have been published to address the expanded scope of the return preparer due diligence penalty under IRC 6695(g). Effective for tax years beginning after December 31, 2017, IRC 6695(g) imposes a $500  penalty on tax return preparers who violate the due diligence requirements. A return preparer may be…

IRS Issues Fact Statement Sheet to Explain How it Contacts Taxpayers

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In order to help taxpayers avoid schemes and scams in which individuals (criminals) impersonate IRS employees, the IRS has released a fact sheet (FS-2018-12) explaining how the IRS contacts taxpayers. How IRS Generally Initiates Contact Most contacts are initiated through regular mail delivered by the US Postal Service. the IRS…

IRS Issues Notice Regarding SALT Workaround

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Earlier this month Governor Murphy signed a bill (S1893) allowing municipalities, counties, and school districts to set up charitable funds to pay for public services. Residents who donate to the funds can receive a credit for up to 90% of the amount paid toward their property tax bills and the…

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