Category: Tax Cuts and Jobs Act

When President Trump signed into law the Tax Cuts and Jobs Act (TCJA) in December 2017, much was made of the dramatic cut in corporate tax rates. But the TCJA also includes a generous deduction for smaller businesses that operate as pass-through entities, with income that is “passed through” to owners and taxed as individual income. The IRS issued proposed regulations for the qualified business income (QBI), or Section 199A, deduction in August 2018. Now, it has released final regulations… Read more ›

The IRS has announced that it will begin accepting paper and electronic tax returns for the 2018 tax year on January 28, but much remains to be seen about how the ongoing shutdown of the federal government will affect this year’s filings. Although the Trump administration has stated that the IRS will pay refunds during the closure — a shift from IRS practice in previous government shutdowns — it’s not clear how quickly such refunds can be processed. Effects of… Read more ›

On Monday, December 10, 2018, the U.S. Treasury Department provided additional guidance on how tax-exempt organizations can compute unrelated business taxable income resulting from parking provided to their employees. The guidance is intended to help employers better understand their new tax situation as it pertains to employee parking. Below is CBM’s overview of the new guidance. In most cases, employer-paid commuting and parking is considered a qualified transportation fringe benefit (QTFB). Because of the 2018 Tax Cut and Jobs Act, tax-exempt nonprofits… Read more ›

The IRS has issued guidance clarifying that taxpayers may continue to deduct 50% of the food and beverage expenses associated with operating their trade or business, despite changes to the meal and entertainment expense deduction under Sec. 274. The amendments in the Tax Cut and Jobs Act of 2017 (TCJA) specifically deny deductions for expenses for entertainment, amusement, or recreation, but did not address the deductibility of expenses for business meals. This has created a lot of confusion, which the… Read more ›

The Tax Reform Bill limits an employer’s ability to deduct the cost of transportation and parking benefits as a business expense. In exchange for the loss in deductibility of certain items, the overall tax rates were reduced. While the deductibility of transportation and parking expenses was removed, pre-tax employee elections for mass transit and parking expenses continue to be available. To understand the impact of tax reform and commuter benefits, we need to consider these three commuter benefits: Direct Payment… Read more ›

The Tax Cuts and Jobs Act (TCJA) was packed with goodies for businesses, but it also seemed to eliminate the popular meal expense deduction in some situations. Now, the IRS has issued transitional guidance — while it works on proposed regulations — that confirms the deduction remains allowable in certain circumstances and clarifies when businesses can claim it. The need for guidance Before the TCJA, Section 274 of the Internal Revenue Code generally prohibited deductions for expenses related to entertainment,… Read more ›

The Tax Cuts and Jobs Act (TCJA) created a new general business tax credit for certain businesses that grant their qualifying employees paid family and medical leave in 2018 and 2019. The IRS now has released Notice 2018-71, which addresses several related issues, including eligibility, types of leave covered and calculation of the credit amount. Notably, the guidance allows employers currently without a paid family and medical leave policy to adopt a retroactive policy before year end and claim the… Read more ›

A Government Accountability Office report released on July 31 included a Treasury Department recommendation for a $4,150 withholding allowance, which would “result in a slightly lower proportion of overwithheld taxpayers and a slightly higher proportion of underwithheld taxpayers under the Tax Cuts and Jobs Act than would have been the case under prior law.” You may read the GAO report by clicking here. Councilor, Buchanan & Mitchell (CBM) is working with clients and other individuals to help them determine their… Read more ›

The tax reform legislation that Congress signed into law on December 22, 2017, was the largest change to the tax system in over 3 decades. The new tax code contains many provisions that will impact everyone, including dealerships. While some provisions will be welcome, others will add a new level of complexity. Dealerships must be mindful of how these changes will impact their dealerships. The key to staying ahead of these changes is awareness and planning. One of the more… Read more ›

CBM has developed this post to inform clients and friends of the firm about changes to the estate and gift tax exemption made by the massive Tax Cuts and Jobs Act effective beginning in 2018. It will result in significantly fewer estates being subject to the 40% tax, and larger estates owing less tax. Before the Tax Cuts and Jobs Act, the first $5 million (as adjusted for inflation in years after 2011) of transferred property was exempt from estate… Read more ›