Analyzing the TCJA’s Impact on States

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Not subject to as much media attention as federal income tax legislation, the state impacts resulting from the enactment of federal legislation always poses budgetary challenges for leadership in those jurisdictions. Oftentimes, federal income tax incentives, such as accelerated and bonus depreciation, can prove unduly costly for states whose income tax regimes are predicated upon […]

PA Adopts Economic Nexus Standard for Sales Tax Collection

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Sales Tax Background Most states have historically looked to nexus as a condition relevant to their capability to levy sales taxes. For decades, states have been bound by the United States Supreme Court National Bella Hess and Quill decisions in defining the required nexus standard for levying taxes in those states. The most relevant determinant of nexus […]

2019 Payroll Updates and Other Tax Developments

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As you begin the new year, we would like to remind you of a number of important business changes that have been implemented by Congress, the Internal Revenue Service, and other authorities for calendar year 2019. We hope that you will find this information helpful. Please view our 1-19 Payroll Tax Alert for complete information.

IRS Releases Draft Instructions for 2018 Form 1040

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With simplicity seemingly in the eyes of the beholder, the Internal Revenue Service (IRS) released the 100+ pages of Draft Instructions for the 2018 Form 1040, U.S. Individual Income Tax Return. The IRS released a draft of the 2018 Form 1040 and six accompanying schedules in June. The instructions note that the IRS generally does not […]

Tax Court Rejects C Corporation Fees as Deductible Expenses

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A common planning strategy for reducing taxable income in a “regular” subchapter C corporation is through the payment of management fees and other charges to related entities (generally-pass-through enterprises or individuals). Oftentimes, these expenditures take the form of excess compensation and/or management fees. However, the payment of these types of expenses does not sit well […]

PA Amends Definition of “Income” for Property Tax/Rent Rebate Program

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For many Pennsylvania seniors, the property tax and rent rebate program has been an important tool in their financial planning. One of the inequities in computing the appropriate rebate has been in the treatment of pension benefits that were fully included in the calculation of income to determine qualification for the rebate. Now, a recently-passed […]

IRS Releases “Draft” Form 1040

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The IRS recently released a “draft” form of the 2018 federal Form 1040. The newly proposed “postcard” form has just 23 lines, cut down from 79 lines on the 2017 Form 1040. In conjunction with the attempt at simplification, the Forms 1040A and 1040EZ have also been eliminated. However, most of the available deductions and […]

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 […]

IRS Takes No Bull on Hobby Loss Rules

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The Internal Revenue Service regularly challenges businesses that are found to generate losses and do not have a profit intent. The specific statute that governs these challenges are known as the “Hobby Loss Rules.” In such challenges, the Internal Revenue Service is trying to prove that the undertaking which has resulted in losses over a […]