IRS Denial of Tax Deductions Paid from PPP Loans Draws Congressional Ire

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IRS Notice 2020-32, released last week, clarified that expenses paid with proceeds from a Paycheck Protection Program (PPP) loan will NOT be deductible in the determination of an employer’s/borrower’s taxable income for 2020. (see related post) This decision has raised the ire of many Congressional leaders who argue that the loss of these deductions was […]

IRS Says No Double-Dipping on Expenses Related to PPP Loans

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On April 30, 2020, the IRS issued Notice 2020-32, to explain that a Paycheck Protection Program (PPP) loan recipient cannot deduct expenses that are normally deductible under the Internal Revenue Code (IRC), to the extent the expenses were reimbursed by a PPP loan that was then forgiven. The PPP was created by the CARES Act […]

House Democrats Look to Increase SALT Deduction Before 2020

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Though the U.S. House of Representatives continues to work through the ongoing impeachment proceedings, the Chamber has apparently found time to produce a proposed tax bill that would primarily serve to increase (at least, temporarily) the dollar limitation on deductible state and local income taxes (SALT) for individuals. It appears that a House vote to […]

Substantiation Rules for Charitable Contributions Continue to Baffle

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As April 15th (the annual D-Day for U.S. taxpayers) is rapidly approaching, confusion still exists as to how to properly substantiate a donation or charitable contribution to a qualifying tax-exempt organization. The lack of clarity relates mostly to a seemingly endless series of technical changes to the substantiation requirements by the Internal Revenue Service. Obtaining […]

State and Local Tax Refunds & the Tax Benefit Rule

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In years prior to 2019, and the enactment of the Tax Cuts and Jobs Act (TCJA), taxpayers were accorded an “unlimited” federal income tax deduction for all state and local income taxes as well as real estate taxes, if they were able to itemize deductions. In those instances when the state and local income taxes […]

IRS vs. NJ Battle Continues

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IRS Reiterates Its “Prepaid Property Tax” Position for NJ Under the Tax Cuts and Jobs Act (TCJA), enacted on December 22, 2017, a taxpayer’s itemized deduction for state and local taxes for the tax years 2018-2025 is limited to $10,000 ($5,000 for married filing separately) per year. This new limitation was particularly burdensome for taxpayers […]

Additional IRS Guidance Expected on the New Sec. 199A Qualified Business Income Deduction

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The Tax Cuts and Jobs Act (TCJA), which was enacted in December 2017, included a new deduction for 20% of qualified business income passing through to equity owners from enterprises electing to be taxed as pass-through businesses (i.e., S corporations, partnerships and sole proprietorships). Under the new tax reform provisions, non-corporate taxpayers may deduct up to […]