Category: Tax Planning & Compliance
Proposed 199A Regulations Narrowly Interpret “Reputation or Skill” Clause for SSTBs
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
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
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
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
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
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…
How the New Qualified Business Income Tax Deduction Affects Attorneys
The New Law The Tax Cut and Jobs Act (the “Act”) was signed into law by President Trump December 22, 2017. One of the main objectives of the Act was to reduce the taxation of business income. The qualified business income deduction can provide significant tax savings for some attorneys…
Big Changes in Federal Tax Laws Have Not Reduced Charitable Deductions
The Tax Cuts and Jobs Act (ACT) went into effect on Jan. 1, 2018. It will take several years to figure out the full impact of the ACT, but areas such as charitable deductions are clear. With the cap on state and local taxes of $10,000, the standard deduction for…
Service Announces Pending Closure of Offshore Voluntary Disclosure Program
IR-2018-53 On March 13, 2018, the Service issued IR-2018-52, announcing its intention to close the Offshore Voluntary Disclosure Program (“OVDP”) effective September 28, 2018. The Service’s stated intention for the issuance of IR-2018-52 is to allow United States taxpayers with undisclosed foreign accounts to use the OVDP before the program…
Gauging the Height of the Specified Service Business Guardrail
K&D shareholder, Daniel L. Mellor authored the following article, “Gauging the Height of the Specified Service Business Guardrail“, which appeared in the February 5, 2018 issue of Tax Notes. In this article, Mellor examines the key definitional element of the new 20% deduction for passthrough income under the recently-enacted Tax Cut and…