Category: Taxation-Individuals

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 ›

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 ›

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 ›

Some people are under the misconception that Social Security benefits are always free from federal income tax. However, depending on how much income you have from other sources, you may have to report up to 85% of your benefits as income on Form 1040 and pay the resulting federal income tax. If this happens, you’re effectively getting taxed twice on the same dollars: First, you’re taxed during your working years when you have to pay federal income taxes on Social… Read more ›

In a much-anticipated ruling that confounded the expectations of many court watchers, the U.S. Supreme Court has given state and local governments the green light to impose sales taxes on out-of-state online sales. The 5-4 decision in South Dakota v. Wayfair, Inc. was met by cheers from brick-and-mortar retailers, who have long believed that the high court’s previous rulings on the issue disadvantaged them, as well as state governments that are eager to replenish their coffers. The previous rulings The… Read more ›

New regulations published by the IRS and U.S. Treasury in January 2018, provided much-needed guidance for partnerships to determine how they might opt out of the partnership audit regime that went into effect following the Bipartisan Budget Act of 2015. The 2015 Act overhauled prior rules set in 1982 that governed the taxability of partnerships. One significant concern addressed by the Bipartisan Act was the lack of a system for addressing any underpaid tax from the partnership entity. The IRS… Read more ›

John Comunale, CPA and Richard Morris, CPA, MST, respectively director of auto dealer services and tax services at Councilor, Buchanan & Mitchell (CBM) will speak about the impact of the new tax legislation, the Tax Cuts and Jobs Act, on auto dealerships throughout the Washington, DC metropolitan region. The presentation will be hosted by the Washington Area New Automobile Dealers Association, the capital region’s auto dealership association that advocates on behalf of franchised auto dealers, their employees and their customers…. Read more ›

The Washingtonian, one of the Washington, DC metropolitan region’s most prominent guides to business, lifestyle and entertainment, interviewed Richard Morris, Councilor, Buchanan & Mitchell (CBM)’s tax services director, about the impact of the Tax Cuts and Jobs Act. The Act, which Congress passed in late December and represents the most significant act of tax reform in more than 30 years, introduces a series of impacts for both businesses and individuals. Mr. Morris specifically addressed the end of deductions for business… Read more ›