Posts tagged Tax Cuts and Jobs Act.

The Tax Cuts and Jobs Act of 2017 (TCJA) imposed a $10,000 cap on the federal deduction for state and local taxes for tax years 2018-2025.  While corporations are not subject to the cap, business owners who pay state and local income tax on pass-through income are subject to the cap.

On November 9, 2019 the IRS released Notice 2020-75 indicating it would issue regulations to clarify that state and local taxes paid by a partnership or corporation would be deductible by the partnership or S corporation when they compute their pass-through income.  This guidance paves the way for states to enact ...

The new 20% deduction for "pass-through" business owners under the Tax Cuts and Jobs Act is raising many questions from owners of real estate-related businesses. Can these owners qualify for this important deduction, and under what conditions?

For most pass-through business owners (such as owners of LLCs, Subchapter S corporations, and partnerships), the deduction is the lessor of (1) the "combined qualified business income" of the taxpayer, or (2) 20% of the excess of taxable income over the sum of any net capital gain. The term "combined qualified business income" is then defined ...

Changes have been made to the income tax withholding tables and estimated tax rates as a result of the new Tax Cuts and Jobs Act.  Taxpayers should pay extra attention now to their tax withholdings and estimated tax payments in order to avoid penalties.

Taxpayers can generally avoid underwithholding/estimated tax penalties if they:

      1. Pay 90% of the current year liability, or
      2. Pay 100% of the prior year liability.

However, If a taxpayer’s adjusted gross income for the prior year was more than $150,000, the taxpayer must then have withholdings or estimated tax payments for the current year ...

The IRS has the power to seize or “levy” assets, banks accounts, wages and other assets and income of an individual or business to satisfy delinquent taxes.  However, the IRS will sometimes levy the wrong assets or income; that is, it will seize assets or income belonging to someone other than the person or business that owes the tax.  This happens.

When the IRS wrongfully seizes or levies the assets or income of a person or business that does not owe the tax, this person/business can file a claim for wrongful levy with the IRS and also can sue the IRS civilly to prevent the levy or to have the ...

Under the Tax Cuts and Jobs Act, Congress is now offering a new 20% deduction for "pass-through" businesses - i.e. businesses that are not corporations. With the corporate tax rate being reduced under the new law to a flat 21%, the 20% deduction for other forms of businesses was designed to give a reduction to these businesses approximating the lower corporate tax rate. If applicable, the 20% deduction can be claimed by the owners of S corporations, partnerships, sole proprietorships, and even the beneficiaries of trusts. These are business entities that do not pay income tax at the ...

The new federal tax law, known as The Tax Cuts and Jobs Act, that was approved by Congress and signed into law at the end of 2017, creates a benefit for individuals paying tuition for children in private or religious schools in grades Kindergarten through 12th grade. 529 Plan funds were only allowed for qualified education expenses, which was previously limited to higher education tuition, room and board, books, computers and software, but NOT for tuition for elementary through high school. The new law has added tuition for private and religious K-12 schools as an approved qualified ...

Aside from corporate tax reductions, one of the most important aspects of the new Tax Cuts and Jobs Act beginning this year is the new 20% deduction for “pass-thru” businesses – i.e. businesses that are not corporations.  With the corporate tax rate being reduced to a flat 21%, the 20% deduction for other forms of businesses was designed to give a reduction to these businesses approximating the lower corporate tax rate.  However, this 20% deduction, found in new Internal Revenue Code § 199A, is saddled with exclusions, phase-outs, technical issues, and uncertainties so that many ...

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