Jackson Kelly PLLC

Tax Monitor

Federal Tax

Some Interesting Tax Provision of the Consolidated Appropriations Act of 2021

There were some long awaited tax changes contained in the Consolidated Appropriations Act of 2021 (the “CAA”), but there were also some interesting additions.

For example, the CAA clarified that taxpayers can deduct expenses paid with PPP Loan proceeds overturning the IRS guidance on this issue. This benefit is substantial for taxpayers and effectively increases the PPP Loan proceeds by the amount…

IRS Release -- Expenses Covered By PPP Loan Are Not Deductible in 2020 Regardless of the Timing of Forgiveness

The IRS has released guidance on the tax issues related to forgiveness of a PPP loan.  In general, under the CARES Act, forgiveness of a PPP Loan is excluded from gross income for federal income tax purposes.  The IRS has clarified that expenses covered by PPP Loan proceeds, namely payroll, are not deductible if the PPP Loan is forgiven.  IRS Notice 2020-32.
 
Recent IRS guidance takes…

NEW IRS GUIDANCE REGARDING § 163(j) LIMITATION OF BUSINESS INTEREST EXPENSE DEDUCTION

Business Interest Expense Deduction

The 2017 Tax Cuts and Jobs Act revised § 163(j) of the Internal Revenue Code (“Code”) to limit the deduction available for business interest expenses in a taxable year to an amount no greater than the sum of:

  1. The taxpayer’s business interest income;
  2. Thirty percent (30%) of the taxpayer’s adjusted taxable income (“ATI”); and 
  3. The taxpayer’s floor plan financing…

Proposed Regulations Provide Guidance on Entities That Can Use Small Business Accounting

Recent IRS proposed regulations outline new accounting method procedures for businesses who want to use the cash method for accounting and how they can qualify to do so under expanded statutory requirements.

The IRS recently issued proposed regulations to implement changes made to the permissible accounting method used by small businesses under the Tax Cuts and Jobs Act of 2017 (“TCJA”). While…

Involuntary Rollovers – Reg BI - What You Need To Know When Participants Have Balances Of $5,000 Or Less And Don't Take Out Their Monies From Retirement Plans

In June 2019, the U.S. Securities and Exchange Commission adopted Regulation Best Interest. Regulation BI (as it is known) imposes a new standard of conduct for broker-dealers when making recommendations of any securities transaction or investment strategy (including account recommendations) to a retail customer. Regulation BI also applies to associated persons of broker-dealers that are natural…

An Update on Taxes During COVID-19 - UPDATED

Breaking News: U.S. Treasury Secretary Steven Mnuchin announced on March 20, 2020 that the IRS is moving Tax Day to July 15, 2020 from April 15. Accordingly, taxpayers can now delay filing and paying taxes until July 15.  Taxpayers can also still delay paying first quarter 2020 estimates until July 15. For details click here.

The Treasury announced yesterday, March 17, 2020, invoking the…

WHAT YOU SHOULD KNOW ABOUT HOW THE SECURE ACT AFFECTS YOU AND YOUR BENEFICIARIES

The SECURE Act1 makes sweeping changes to the required minimum distribution (“RMD”) rules for retirement accounts. Except for a few types of beneficiaries, it eliminates the most popular tax-advantaged planning feature - the ability of a retirement beneficiary to stretch RMDs over the beneficiary’s life expectancy. The elimination of the stretch fundamentally changes how beneficiaries are taxed…

TIPS FOR THE SMALL EMPLOYER: WHAT YOU NEED TO KNOW NOW ABOUT THE SECURE ACT AND YOUR RETIREMENT PLAN

The SECURE Act, signed into law on December 20, 2019, may help alleviate some of the burdens small employers face when providing retirement plans. Here are a few key things you need to know when evaluating what, if any, changes you should make to take advantage of this new legislation. 

OPEN MULTIPLE EMPLOYER PLANS

While Multiple Employer Plans (or MEPs) are not new to the retirement industry, they…

U.S. Supreme Court Holds That West Virginia Tax Exemption Unlawfully Discriminates Against Federal Law Enforcement Retirees

The United States Supreme Court recently put an end to West Virginia’s practice of exempting pension income of certain State law enforcement officers from the State’s income tax while disallowing the exemption for similarly situated federal retirees.  At issue was a provision in the State’s tax code that exempts from West Virginia income tax pension payments received from a number of pension funds…

Estate Planning Under the 2017 Tax Cuts and Jobs Act

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (“Tax Act”) into law which makes significant changes to the estate, gift, and generation skipping taxes.

The Tax Act doubles the estate, gift, and generation skipping tax exemptions to approximately $11.2 Million per person for 2018, which provides significant relief for high net worth individuals and families with valuable…

Tax Deferred Annuities – Heightened Fiduciary Scrutiny

Over the last several years, much has been written in connection with the surge of “excessive fee” litigation against Section 401(k) plans.  The surge continues and has now been extended to Section 403(b) plans which are often referred to as Tax Deferred Annuities.  One commentator estimates that over twenty class action excessive fee litigation cases were filed during the first quarter of 2016…

Employee or Independent Contractor? That is the Question

The federal government continues to focus on what various agencies refer to as “misclassified” employees -- workers who should be treated as employees but whom the employer classifies as independent contractors. Many businesses prefer to utilize independent contractors rather than employees. With independent contractors, businesses are not subject to FICA/FUTA obligations, federal and state…

 

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