As discussed in our seminars, several tax provisions that affect individual taxpayers expired after 2017. These provisions include, among others, the above-the-line deduction for higher education tuition/fees, the mortgage insurance premiums deduction on Schedule A, the exclusion of income on the discharge of up to $2 million of home acquisition indebtedness secured by a principal residence, an...
As discussed in our seminars, the Tax Cuts and Jobs Act changed the rules for deemed distributions of loans from employer-sponsored retirement plans when an employee leaves employment. (See page 57 of the M+O=CPE Individual Tax Year-End Workshop Reference Book Tax Year 2018 for a discussion of these provisions.) The outstanding loan amount is treated as a deemed distribution, unless the form...
The IRS has announced additional relief for some taxpayers who might otherwise be subject to the penalty for underpayment of estimated taxes. As discussed in our January 16, 2019 post, the IRS had previously provided relief for some individual taxpayers who may have insufficient withholding due to changes made by the Tax Cuts and Jobs Act and the revised withholding tables issued shortly afte...
As discussed in our seminars, qualified improvement property was affected by a technical glitch in the Tax Cut and Jobs Act, which was enacted on December 22, 2017. Qualified improvement property is any improvement to an interior portion of a building which is nonresidential real property that meets certain other restrictions and requirements. (See pages 59 to 60 of the M+O=CPE Individual Tax...
New York State recently issued N-19-1, Notice Regarding Sales Tax Registration Requirements for Businesses with No Physical Presence in New York State, in which it reminded businesses that, due to the Supreme Court’s June 2018 decision in the South Dakota v. Wayfair case, certain existing provisions in the New York State Tax Law that define a sales tax vendor immediately became effective. A ...
As discussed in our seminars, the provision that allows 100% bonus depreciation contains a technical glitch related to computing depreciation on bonus-eligible vehicles that weigh 6,000 pounds or less. The glitch affects the allowable depreciation after the first year of the vehicles’ recovery period. Due to the way the bonus provision was drafted and the way that it interacts with other p...
The instructions for the 2018 version of Form 1065, U.S. Return of Partnership Income, contain a new requirement that has not been widely publicized. The change appears on page 30 of the instructions and relates to the capital account analysis (item L) on Schedule K-1. According to the instructions, if a partnership reports the capital account analysis using any basis other than the tax basi...
Tax preparation software for entity tax returns must compute qualified business income for the purpose of the §199A deduction to be included in the other information box of Schedules K-1. (If an entity prepares Schedules K-1 without including §199A details in the other information box, the recipient of the K-1 is precluded from taking the §199A deduction on the recipient’s Form 1040.) M...
As we discussed in our seminars, when a taxpayer receives a Schedule K-1 from a fiscal-year entity with a year that began prior to January 1, 2018 and ended during 2018, the income (or loss) on the Schedule K-1 is used to compute the taxpayer’s 2018 qualified business income, to the extent that it is otherwise eligible for the qualified business income deduction. However, if the entity that ...
With the prevalence of identity theft, it is vital that practitioners protect sensitive client data. Client data is especially vulnerable during tax season, since many clients send data to practitioners using unsecure means. An email attachment that is not encrypted with a password is extremely vulnerable to interception by identity thieves. Since many clients do not think about the need f...
