Employee Benefits Blog

Posts tagged Tax Cuts & Jobs Act

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Proposed Regulations Will Shut Down Most End Runs around New State Tax Deduction Limits

One of the features in December’s Tax Cuts and Jobs Act (“TCJA”) that gathered the most attention and disagreement was a section that capped the deductibility of state and local taxes at $10,000. Almost immediately, some new state and local tax arrangements began cropping up that seemed designed to offer taxpayers the ability to circumvent this new TCJA limitation. (Some such programs already existed, but overall they saw dramatically increased activity.) As a result, the Treasury Department warned early this summer that it planned to issue regulations curbing what it saw as abuse of these programs. Last week, it followed through by issuing REG-112176-18, the topic of this article.

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Taxpayers Lose When Losses are Lost

(A survey of various tax losses and the new and old rules that delay and limit their use)

When a taxpayer generates a loss, it generally either offsets other sources of income and therefore reduces the amount of tax that otherwise would be paid, or may even produce a net loss that in some instances can generate a refund of taxes previously collected. Because use of losses causes the IRS coffers to suffer, a number of restrictions exist in U.S. tax laws that hamper a taxpayer’s ability to convert an actual financial loss into a currently-useable deduction. December’s Tax Cuts and Jobs Act (“TCJA”) rolled out some entirely new restrictions that will impact many people. This seems like an appropriate time to provide a refresher on the various types of tax losses that exist and the numerous old and new limitations that curb their use.

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New Guidance on Unrelated Business Income “Silo” Requirements

(How Revenue Procedure 2018-67 Impacts Tax-Exempt Organizations)

While most of the provisions in the Tax Cuts and Jobs Act of 2017 (the Act) passed by Congress in December of 2017 focus on for-profit entities and individuals, there were a handful of provisions that will directly impact tax-exempt organizations. As with many of the aspects of the Act that pertain to for-profit entities and individuals, tax-exempt organizations were not short on questions after reading through the Act. Significant guidance was needed to clarify and define various provisions in the Act and to instruct taxpayers how to implement the new rules.  This week’s release of Revenue Procedure 2018-67 represents the first formal guidance received on the matter, and its contents are summarized in this article.

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Save the Date! Tax Reform Breakfast Seminars in October

How will the recent tax reform affect your business and year-end planning in 2018? Join us for breakfast and find out.

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Proposed Section 199A Regulations are Issued

(The IRS Attempts to Explain the 20% Pass-Through Deduction)

One of the most wide-reaching features of December’s Tax Cuts and Jobs Act is the entirely new deduction under Internal Revenue Code Sec. 199A that provides a deduction equal to 20% of certain “pass-through” business income. However, as welcome as the new rule was, Congress rolled out ill-defined terminology and computational ambiguities that left even the most experienced practitioners with numerous questions. This was especially frustrating, because the concept itself of this new deduction is straightforward.

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New Proposed Regulations addressing Section 199A’s new 20% deduction of certain pass-through income

Today the Treasury Department released proposed regulations intended to clarify Section 199A of the Internal Revenue Code. This section of law was introduced by December’s Tax Cuts and Jobs Act, and created a completely new, 20% deduction of certain pass-through and other “business” income. It also created numerous, significant questions regarding qualification for the new deduction.