Category: Taxation-Individuals

The IRS has some good news for certain taxpayers — it’s waiving underpayment penalties for those whose 2018 federal income tax withholding and estimated tax payments came in under their actual tax liabilities for the year. The waiver recognizes that the Tax Cuts and Jobs Act’s (TCJA’s) overhaul of the federal income tax regime made it difficult for some taxpayers to determine the proper amount to have withheld from their paychecks or include in their quarterly estimated tax payments for… Read more ›

The IRS has announced that it will begin accepting paper and electronic tax returns for the 2018 tax year on January 28, but much remains to be seen about how the ongoing shutdown of the federal government will affect this year’s filings. Although the Trump administration has stated that the IRS will pay refunds during the closure — a shift from IRS practice in previous government shutdowns — it’s not clear how quickly such refunds can be processed. Effects of… Read more ›

The Tax Reform Bill limits an employer’s ability to deduct the cost of transportation and parking benefits as a business expense. In exchange for the loss in deductibility of certain items, the overall tax rates were reduced. While the deductibility of transportation and parking expenses was removed, pre-tax employee elections for mass transit and parking expenses continue to be available. To understand the impact of tax reform and commuter benefits, we need to consider these three commuter benefits: Direct Payment… Read more ›

Please note that following our year-end tax planning letter below are links to additional tax planning resources.  As this year is about to end, now is an excellent time to review your current tax planning strategies to ensure they’re still meeting your needs, and develop plans for 2019. It’s also a good time to take advantage of last-minute planning opportunities that could save you money now and in the coming year. With all that in mind, please call Marcia Cohen… Read more ›

The Tax Cuts and Jobs Act (TCJA) was packed with goodies for businesses, but it also seemed to eliminate the popular meal expense deduction in some situations. Now, the IRS has issued transitional guidance — while it works on proposed regulations — that confirms the deduction remains allowable in certain circumstances and clarifies when businesses can claim it. The need for guidance Before the TCJA, Section 274 of the Internal Revenue Code generally prohibited deductions for expenses related to entertainment,… Read more ›

A Government Accountability Office report released on July 31 included a Treasury Department recommendation for a $4,150 withholding allowance, which would “result in a slightly lower proportion of overwithheld taxpayers and a slightly higher proportion of underwithheld taxpayers under the Tax Cuts and Jobs Act than would have been the case under prior law.” You may read the GAO report by clicking here. CBM is working with clients and other individuals to help them determine their withholding amounts and better… Read more ›

In February 2018, the IRS modified the federal income tax withholding tables as a result of the reduced 2018 Federal income tax rates incorporated by the 2017 Tax Cuts and Jobs Act (TCJA). This modification may produce one of the following for you: (1) you are under-withheld, which will result in unexpected tax liabilities upon the filing of your 2018 returns, and perhaps the imposition of penalties for under-withholding; OR (2) you may be over-withheld, which means you are paying… Read more ›

The tax reform legislation that Congress signed into law on December 22, 2017, was the largest change to the tax system in over 3 decades. The new tax code contains many provisions that will impact everyone, including dealerships. While some provisions will be welcome, others will add a new level of complexity. Dealerships must be mindful of how these changes will impact their dealerships. The key to staying ahead of these changes is awareness and planning. One of the more… Read more ›

Some people are under the misconception that Social Security benefits are always free from federal income tax. However, depending on how much income you have from other sources, you may have to report up to 85% of your benefits as income on Form 1040 and pay the resulting federal income tax. If this happens, you’re effectively getting taxed twice on the same dollars: First, you’re taxed during your working years when you have to pay federal income taxes on Social… Read more ›

In a much-anticipated ruling that confounded the expectations of many court watchers, the U.S. Supreme Court has given state and local governments the green light to impose sales taxes on out-of-state online sales. The 5-4 decision in South Dakota v. Wayfair, Inc. was met by cheers from brick-and-mortar retailers, who have long believed that the high court’s previous rulings on the issue disadvantaged them, as well as state governments that are eager to replenish their coffers. The previous rulings The… Read more ›