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Tax

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IRS Issues Guidance on Deductibility of Expenses Incurred from PPP Proceeds

There has been great speculation on how to treat the expenses paid by a business that received Paycheck Protection Program (PPP) funds since the IRS had indicated that those expenses would not be deductible for tax purposes. The issue at hand was the timing of the non-deduction. Specifically, the question is: are the expenses deductible in the year paid, or the year when the loan is forgiven?

Veterans Eligible for New Jersey Property Tax Deduction

The recent vote by New Jersey residents expands eligibility for a $250 property tax deduction to include all veterans – whether they served in a time of war or peace. This is a significant departure from the previous law under which the deduction was available only to those who served the country during a war. In addition, the property tax exemption now covers totally disabled veterans regardless of when or where they served.   

With a strong voice, 76% of all voters agreed to this change.

New Tax Act = New Employee’s Withholding Certificate

There were a number of significant changes made to existing tax regulations when the Tax Cuts and Jobs Act (“TCJA”) was passed in 2018. As a result of the Act going into effect, it was necessary for the Internal Revenue Service (“IRS”) to develop a new Employee’s Withholding Certificate (“Form W-4”) that would account for the requirements of the new legislation.

Form W-4 Changes are Important for Employers and Employees   

Employees who are asked to complete the new form will notice that:

Private Foundations - Tax Simplification

The Taxpayer Certainty and Disaster Relief Act that was passed on December 20, 2019 had an important provision that applies directly to tax-exempt private foundations.  The legislation reduced the excise tax on net investment income from 2% to 1.39%. However, the Act also eliminated the special 1% tax rate that applied if certain distribution requirements were met.

Tax Relief for Disaster Victims

When President Trump signed the Taxpayer Certainty and Disaster Tax Relief Act of 2019 into law, it extended the deadlines of many provisions that had expired. We shared much of this information in a recently published article that included a synopsis of some of the specific deadlines that have now been extended.

Along with tax relief for areas such as mortgage debt exclusion, mortgage insurance premiums, tuition and fees deduction, energy efficient tax credits, and medical expense deduction, to name a few, the act also includes special tax relief for certain disaster victims.

IRS Finalizes Qualified Opportunity Zone Regulations

The IRS has released final regulations on investing in Qualified Opportunity Zones (QOZs).

The final rules retain the general approach of regulations proposed on 10/28/18 and 5/1/19, but introduce certain modifications. Among other things, the final regulations

(1) 

provide additional guidance on the election to temporarily defer the inclusion of certain eligible gain

(2) 

Congress passed the SECURE Act

Congress passed the SECURE (Setting Every Community Up for Retirement Enhancement) Act, which now awaits the President’s signature to be enacted into law. The bill includes multiple changes that affect retirement plans and individual retirees. Those changes which affect individual retirees (and those nearing retirement age) are discussed below.

Required Minimum Distributions

Final IRS Rules Shield Large Gifts from Future Tax

Internal Revenue Service (IRS) has issued final rules protecting taxpayers from having to pay estate tax later on large gifts made from 2018 through 2025 that are currently exempt from tax because of changes made by the Tax Cuts & Jobs Act of 2017.

The final regulations (TD 9884), released on November 22, 2019, allow an estate to apply a higher credit currently available for gifts rather than a lower credit that  goes into effect after 2025.

Being Ready is Key

A quick glance at the Weather Channel is all we need to get the idea that the climate is unpredictable.

The extraordinary number of hurricanes, the polar vortex slippage and accompanying deep freeze, and now the violent storms and tornadoes ripping across the country, say it all. From fires and droughts to floods and mudslides, natural disasters are all around us.

While these may come upon us suddenly, giving us a sense of impotence, often there is some time to prepare.

New IRS Proposed Regulations Are Announced

When the Tax Cuts and Jobs Act was signed into law in December 2017, unanswered questions regarding how to execute some key components of the Act remained.

One of the most pressing questions raised at the time of the Act’s passage was in Section 199A regarding the impact of lowering the tax rate for corporations to 21%, while keeping individual tax payer rates at a higher level.

Why is This a Big Deal?  

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