Category: Taxation-Corporate

Updated August 14, 2024 What is a Pass-through Entity Tax? The Tax Cuts and Jobs Act of 2017 (TCJA) imposed a $10,000 limitation on the state and local tax (SALT) deduction for individuals who itemize deductions on their federal income tax return for tax years beginning after 2017 and before 2026. In response, many states have enacted a mandatory or elective pass-through entity (PTE) tax as a workaround to the SALT cap. The PTE tax allows eligible pass-through entities to… Read more ›

“I’ll do your family’s dental work for free if you build a deck onto my house.” If you’re in the construction industry, you’ve probably received an offer like this or made a similar offer to someone else in a different line of business. It’s a modern variation of the age-old practice of barter. What makes it especially intriguing in this day and age is the idea that you can exchange services or products with someone without exchanging money. Keep in… Read more ›

Acquiring a company will leave you with a long to-do list, which means you can’t devote all of your time to the deal’s potential tax implications. However, if you neglect tax issues during the negotiation process, the negative consequences can be serious. To improve the odds of a successful acquisition, it’s important to devote resources to tax planning before your deal closes. Complacency Can Be Costly During deal negotiations, you and the seller should discuss such issues as whether and how much… Read more ›

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 ›

Sooner or later, your firm will encounter the issue of buying out a partner. This may be due to the partner’s retirement, death or other reasons. The federal income tax rules for partnership payments to buy out an exiting partner’s interest are tricky, but they also open up tax planning opportunities. The Basic Tax Rules Payments made by a partnership to liquidate (or buy out) an exiting partner’s entire interest are covered by Section 736 of the Internal Revenue Code…. Read more ›

Following passage by the U.S. Senate and House of Representatives, President Biden has signed into law the Inflation Reduction Act (IRA). The IRA includes significant provisions related to climate change, health care, and, of course, taxes. The IRA also addresses the federal budget deficit. According to the Congressional Budget Office (CBO), the IRA is projected to reduce the deficit by around $90 billion over the next 10 years. Although the IRA falls far short of Biden’s originally proposed $2 trillion… Read more ›

The Creating Helpful Incentives to Produce Semiconductors for America Act (CHIPS Act) was recently passed by Congress as part of the CHIPS and Science Act of 2022. President Biden is expected to sign it into law shortly. Among other things, the $52 billion package provides generous tax incentives to increase domestic production of semiconductors, also known as chips. While the incentives themselves are narrowly targeted, the expansion of semiconductor production should benefit a wide range of industries. In particular, it… Read more ›

Tax-free shopping returns to Maryland and Virginia in August for those looking for a good deal on back-to-school shopping and emergency preparedness items. Below are details on qualified items. Maryland Tax-Free Week | August 14 – 20, 2022 Which items are eligible? Clothing and footwear Qualified articles of clothing or footwear – $100 or less Backpacks – $40 or less Click here for frequently asked questions and valuable facts provided by the Comptroller of Maryland. Virginia’s 3-Day Sales Tax Holiday… 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 ›

You may think you don’t need disability insurance — but you probably do. Whether you have group disability insurance from your employer or buy it yourself, chances are you’re underestimate and may not be able to afford what you need for short-term or long-term insurance in the event of sickness or injury. Even if you have group disability insurance, it may not be enough. The drawbacks include: Coverage may be limited to a short term, perhaps only two years, Coverage… Read more ›