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The Internal Revenue Service recently modified and updated the rules for using optional standard mileage rates to calculate the deductible costs of operating an auto for business, charitable, medical, or moving purposes. The new rules, outlined in Revenue Procedure 2019-46, have been updated to reflect changes in federal income tax law that were made by […]
Taxpayers who have attained the age of 70½ must begin to consider taking distributions from qualified retirement plans, simplified employee pensions (SEPs), Simple IRAs and traditional “non-Roth” IRAs. A required minimum distribution (RMD) is the amount of money that must be withdrawn from a by owners of those plans. Under the rules, taxpayers must begin […]
The Internal Revenue Service has released cost-of-living adjustments to pension plans and other retirement-related items for 2020 in IR-2019-179. Many of the limits applicable to pension and other retirement plans have increased, however, the limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and […]
A coverage threshold is an amount of earnings that triggers coverage under the Social Security program. The Social Security Administration (SSA) has announced a new threshold for “cash” wages paid by an employer for domestic service in the employer’s private household. Employer Social Security tax obligations are an often-missed liability for households engaging individual assistance […]
Section 199A, Qualified Business Income, which was added to the federal tax law by the Tax Cuts and Jobs Act enacted at the end of 2017, is one of the more complex provisions ever incorporated into the law. Nearly 24 months after enactment, the provision still continues to baffle taxpayers and practitioners alike. Nowhere is […]
The Internal Revenue Service announced in IRS Notice IR-2019-157 that it would send time-limited settlement offers to certain taxpayers who participated in abusive micro-captive insurance transactions and are under audit. Eligible taxpayers will be notified of this offer by a letter containing the applicable terms. The IRS has already sent notices to up to 200 […]
The changes enacted under the Tax Cuts and Jobs Act at the end of 2017 caused many taxpayers to struggle in meeting their 2018 federal income tax withholding obligations. Due to the “lateness” of that legislation and the complexity inherent in many of the new provisions contained in the new law, calculating proper federal income […]
With the ups and downs of the financial markets over the last several weeks, it seems that political conversation has turned to the consideration of additional tax cuts as a vehicle for economic stimulus to ward off any recession that might be on the horizon. Recent discussions coming from the Trump administration have touted a […]
A fundamental tenant of taxation under the United States Internal Revenue Code is that taxable income includes “all income from whatever source derived”. Thus, under the tax law, all sources of economic enrichment are taxable unless there is a specific provision which works to exclude that item. Supplementing this tenant is a second fundamental tenant […]
An often discussed income tax provision in past decades has been the idea of removing the effect of inflation in the determination of taxable capital gains. A simple illustration demonstrates the fundamental idea. Assume an individual buys a share of stock at $1,000 (original tax basis) and its value after 10 years is $2,500. If […]
