Continuing with the unofficial game show theme of CPE Day, GYF’s Mike Weber and Rebekah Flanders tied their presentation to the 1980’s Press Your Luck and reviewed a number of important considerations to help taxpayers avoid the “tax” Whammy! The presenters did a great job at making a tax update topic fun and lighthearted, taking a whimsical approach to informing attendees about recent changes in the tax world. Some of the topics covered included Employee Retention Credit (ERC) developments, the Federal Corporate Transparency Act (CTA), new Pennsylvania Annual Reporting Requirements, Research and Experimental Expenditures (R&D), and Pass-Through Entity Tax (PTET) elections.
The ERC update reviewed some background about the tax credit and how it has impacted employers since being enacted in March of 2020. Mike relayed some red flags to watch out for as there have been a multitude of scams by ERC promoters, as well as increased fraud concerns leading to criminal cases. The IRS released a moratorium on processing new ERC claims as well as resources for taxpayers who may have been victimized by scanners. (see related linked blog posts)
The Federal CTA update included an overview of the Act as well as who qualifies or is exempt from filing. The Act was passed in late 2020, and is estimated to impact 33 million companies with an expected additional 5 million companies each year. Since the CTA is relatively new, Mike and Rebekah gave a detailed list of what is expected of filers based on reporting requirements and where to file. This Act is still being updated, but some resources can be found here: Small Entity Compliance Guide & BOI FAQs
Mike and Rebekah also provided a brief overview of several other topics:
- Pennsylvania instituted a new Annual Reporting Requirement under Act 122 of 2022. Under this Act, the PA Department of State will be able maintain the most current listing of entities formed and registered to do business within the Commonwealth. Effective January 1, 2024, all entities that qualify will be required to file their first report in 2025 (due dates based on type of entity). Compliance with the reporting requirements is critical as there can be strict consequences for not filing, such as entity dissolution, termination or cancellation. Failure to meet these requirements could lead to the non-complying entity’s name being up for grabs by another entity.
- In December 2017, the TCJA made changes to the Specified Research & Experimental Expenditures, known more commonly as R&D expenses, causing an unhappy response from the tax community. There appears to be no repeal in sight for the changes, but the IRS issued interim guidance clarifying various Sec. 174 provisions. (see related post)
- The TCJA also imposed a $10,000/$5,000 limitation on the Schedule A itemized deduction for state and local taxes, which led many states to permit pass-through entities (PTEs) to pay the state tax on behalf of owners. This “SALT Cap Workaround” allows tax deductions to be realized at the PTE level, and the credits for taxes paid being passed through to the owners can offset tax liability on their individual state tax returns. (see related post)
Wrapping up their presentation with “Potpourri” coverage, Mike and Rebekah highlighted state news such as Ohio CAT changes (see related post) and the PA Corporate net income tax phase-down (see related post). They also shared Federal tax updates including the RMD age being increased to 73 (for qualifying taxpayers) and the Bonus Depreciation phase-down. Overall, Mike and Rebekah provided a very informative yet fun presentation on a wide variety of issues impacting corporate and individual tax filers.
Click here to access copies of the slides, links to resources and a video of the presentation
About GYF’s CPE Day: The firm presents this program each year to bring together clients, friends of the firm, and other professionals who are interested in gaining knowledge. The day is always filled with interesting presentations and great networking opportunities, and is generally attended by 300+ guests. If you have any questions about the material covered, or other issues we did not have time to address, please reach out to your GYF Executive or contact the office at 412-338-9300. We look forward to seeing everyone next year!
