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Category: Tax Cuts and Jobs Act

February 21, 2023

Estate Planning Tips for Married Couples

For married people with large estates, the Tax Cuts and Jobs Act (TCJA) brings welcome relief from federal estate and gift taxes, as well as the generation-skipping transfer (GST) tax. Here’s what you need to know and how to take advantage of the favorable changes. Estate Planning Tips: Estate and Gift Tax Basics The TCJA sets the unified federal estate and gift tax exemption at $12.92 million per person for 2023 (up from $12.06 million for 2022). For married couples,… Read more ›

February 17, 2023

Reading the Tea Leaves: Potential Tax Legislation in the New Congress

The 2022 mid-term election has shifted the scales in Washington, D.C., with the Democrats no longer controlling both houses of Congress. While it remains to be seen if — and when — any tax-related legislation can muster the requisite bipartisan support, a review of certain provisions in existing laws may provide an indication of the many areas ripe for action in the next two years. Retirement catch-ups at risk The SECURE 2.0 Act, enacted at the tail end of 2022,… Read more ›

December 30, 2022

The Tax Deductible Mileage Rate for Business Driving Increases for 2023

The IRS has announced the 2023 optional standard mileage rates used to calculate the deductible costs of operating a vehicle for business, charitable, medical or moving purposes. Background: If you use a vehicle for business driving, you can generally deduct the actual expenses attributable to your business use. This includes expenses such as gas, oil, tires, insurance, repairs, licenses and vehicle registration fees. In addition, you may claim a depreciation allowance for the vehicle, based on the percentage of business… Read more ›

October 27, 2022

What Do the 2023 Cost-of-living Adjustment Numbers Mean for You?

The IRS recently issued its 2023 cost-of-living adjustments for more than 60 tax provisions. With inflation up significantly this year, many amounts increased considerably over 2022 amounts. As you implement 2022 year-end tax planning strategies, be sure to take these 2023 adjustments into account. Also, keep in mind that, under the Tax Cuts and Jobs Act (TCJA), annual inflation adjustments are calculated using the chained consumer price index (also known as C-CPI-U). This increases tax-bracket thresholds, the standard deduction, certain… Read more ›

August 29, 2022

Pass-through Entity Tax Rules and Treatments in the DC Metropolitan Area

What is a Pass-through Entity Tax? The Tax Cuts and Jobs Act of 2017 (TCJA) imposed a $10,000 limitation on the state and local tax (SALT) deduction for individuals who itemize deductions on their federal income tax return for tax years beginning after 2017 and before 2026. In response, many states have enacted a mandatory or elective pass-through entity (PTE) tax as a workaround to the SALT cap. The PTE tax allows eligible pass-through entities to deduct state taxes at… Read more ›

August 19, 2022

Plan Now to Reduce AMT Exposure

First the bad news: Despite passage of the Tax Cuts and Jobs Act (TCJA), the individual alternative minimum tax (AMT) is still in place. But there’s some good news: The law has made AMT rules more taxpayer-friendly through 2025. In addition, other TCJA changes reduce the odds that you’ll owe the AMT for those years. Even so, you may still benefit from taking steps now to avoid or minimize it. Know the Basics The AMT is connected to, but separate… Read more ›

July 22, 2022

Businesses: Act Now to Make the Most Out of Bonus Depreciation

The Tax Cuts and Jobs Act (TCJA) significantly boosted the potential value of bonus depreciation for taxpayers — but only for a limited duration. The amount of first-year depreciation available as a so-called bonus will begin to drop from 100% after 2022, and businesses should plan accordingly. Bonus depreciation in a nutshell Bonus depreciation has been available in varying amounts for some time. Immediately prior to the passage of the TCJA, for example, taxpayers generally could claim a depreciation deduction… Read more ›

May 3, 2022

Hobby-Related Loss Deductions are Disallowed, but Don’t Give Up

  Let’s say you have an unincorporated sideline activity that you think of as a business, including an activity involving horses. If you have a net loss (deductible expenses exceed revenue) on that activity and you think you can deduct that loss on your personal federal income tax return, think again! In IRS audits and in court cases involving money-losing sidelines, the tax agency frequently argues the activities are hobbies, rather than businesses. Be aware that the federal income tax… Read more ›

April 8, 2022

Preparing Form 990: Pay Attention to These Eight Items

  If your not-for-profit organization operates on a calendar-year tax basis, the deadline for filing your 2021 Form 990 (Form 990 EZ for certain small organizations) is right around the corner — May 15, 2022. Besides filing on time, you must ensure the information provided on your form is accurate. Pay particular attention to the following eight issues that commonly trip up nonprofits: 1. Unrelated business income tax (UBIT). If your not-for-profit regularly engages in activities that generate profits, for… Read more ›

April 7, 2022

How the Current Tax Law Affects Charitable Giving from IRAs

  For charitable donors, the Tax Cuts and Jobs Act (TCJA) provided some tax breaks and took away others. Here’s what charity-minded individuals need to know. Increased Charitable Deduction Limit Under prior law, deductions for cash contributions to public charities and certain private foundations were limited to 50% of your adjusted gross income (AGI). The TCJA, which passed in December of 2017, increased the deductible limit to 60% of AGI for the 2018-2025 tax years. Deductions that are disallowed by… Read more ›