Category: Tax Cuts and Jobs Act

First the bad news: Despite passage of the Tax Cuts and Jobs Act (TCJA), the individual alternative minimum tax (AMT) is still in place. But there’s some good news: The law has made AMT rules more taxpayer-friendly through 2025. In addition, other TCJA changes reduce the odds that you’ll owe the AMT for those years. Even so, you may still benefit from taking steps now to avoid or minimize it. Know the Basics The AMT is connected to, but separate… Read more ›

The Tax Cuts and Jobs Act (TCJA) significantly boosted the potential value of bonus depreciation for taxpayers — but only for a limited duration. The amount of first-year depreciation available as a so-called bonus will begin to drop from 100% after 2022, and businesses should plan accordingly. Bonus depreciation in a nutshell Bonus depreciation has been available in varying amounts for some time. Immediately prior to the passage of the TCJA, for example, taxpayers generally could claim a depreciation deduction… Read more ›

  Let’s say you have an unincorporated sideline activity that you think of as a business, including an activity involving horses. If you have a net loss (deductible expenses exceed revenue) on that activity and you think you can deduct that loss on your personal federal income tax return, think again! In IRS audits and in court cases involving money-losing sidelines, the tax agency frequently argues the activities are hobbies, rather than businesses. Be aware that the federal income tax… Read more ›

  If your not-for-profit organization operates on a calendar-year tax basis, the deadline for filing your 2021 Form 990 (Form 990 EZ for certain small organizations) is right around the corner — May 15, 2022. Besides filing on time, you must ensure the information provided on your form is accurate. Pay particular attention to the following eight issues that commonly trip up nonprofits: 1. Unrelated business income tax (UBIT). If your not-for-profit regularly engages in activities that generate profits, for… Read more ›

  For charitable donors, the Tax Cuts and Jobs Act (TCJA) provided some tax breaks and took away others. Here’s what charity-minded individuals need to know. Increased Charitable Deduction Limit Under prior law, deductions for cash contributions to public charities and certain private foundations were limited to 50% of your adjusted gross income (AGI). The TCJA, which passed in December of 2017, increased the deductible limit to 60% of AGI for the 2018-2025 tax years. Deductions that are disallowed by… Read more ›

  The individual alternative minimum tax (AMT) rules were made more taxpayer-friendly for 2018 through 2025 by the Tax Cuts and Jobs Act (TCJA). The odds that you’ll owe the AMT for those years have been significantly reduced — and, if you still owe the AMT, you’ll probably owe less than under prior law. Are you at risk for this dreaded tax? Various factors make it difficult to pinpoint exactly who will be hit by the AMT. Here’s a summary… Read more ›

  Real estate investors often unload one property and replace it with another. But making an outright sale of an appreciated property results in a current tax hit. That’s unfortunate if you intend to use the sales proceeds to buy replacement property. The good news: Section 1031 of the Internal Revenue Code allows you to postpone your tax bill by arranging for a property exchange. With real estate prices up dramatically in many markets, the Section 1031 exchange strategy is… Read more ›

How does the Tax Cuts and Jobs Act (TCJA) affect divorce settlements? Changes in the new law may require divorcing individuals — especially those who own businesses and other investments — to take a different approach to splitting assets and setting maintenance payments than under prior law. To illustrate, consider Pat and Chris, a hypothetical married couple who decided to file for divorce on Valentine’s Day 2019. Here’s an overview of several key issues they face. Business Tax Issues Pat… Read more ›

Negotiations continue in Washington, D.C., over the future of President Biden’s agenda. Tax law changes may be ahead under two proposed laws, the Build Back Better Act (BBBA) and the Bipartisan Infrastructure Bill (BIB), also known as the Infrastructure Investment and Jobs Act. The final provisions remain to be seen, but the BBBA and, to a lesser extent, the BIB, contain a wide range of tax proposals that could affect individuals and businesses. It’s also unclear when the tax changes… Read more ›

President Biden recently announced his $1.8 trillion American Families Plan (AFP), the third step in his Build Back Better policy initiative. The announcement followed the previous releases of the proposed $2.3 trillion American Jobs Plan and the Made in America Tax Plan. These plans propose major investments in various domestic initiatives, such as expanded tax credits for families, offset with tax increases on high-income individual taxpayers and corporations. American Families Plan: Proposed tax changes for the wealthy The American Families… Read more ›