In Revenue Procedure 2022-38, released on October 19, 2022, the IRS issued the tax year 2023 annual inflation adjustments. It includes changes to over 60 tax provisions, many of which will be relevant to taxpayers filing their returns in 2024.
In late September 2022, the IRS released Notice 2022-44, which outlined the changes coming to the special per diem rates used by taxpayers to substantiate ordinary and necessary business travel expenses. Beginning October 1, the rates are slightly higher.
In June 2022, New Jersey Governor Phil Murphy signed the Fiscal Year 2023 Appropriations Act, also known as the State’s budget for the coming fiscal year. One highlight of the budget is the Affordable New Jersey Communities for Homeowners and Renters Property Tax Relief Program (ANCHOR). This program replaces the Homestead Benefit program and will provide relief to double the number of homeowners and also include renters, which the previous program did not.
In late August, President Biden signed the Inflation Reduction Act into law. As the name suggests, the legislation is designed to help counter the ill effects of inflation while creating new jobs, lowering healthcare costs, revitalizing manufacturing, and promoting clean energy investment. Key priorities in the legislation include the reduction of carbon emissions and the investment in domestic clean energy manufacturing. To facilitate the changes, several tax updates have been introduced including a 15% corporate minimum tax, a 1% stock buyback fee, and bolstered IRS tax enforcement efforts. There are also new and expanded tax incentives to promote clean energy investments. These incentives create a unique opportunity for real estate and construction companies to obtain significant tax savings.
In September 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-07, Not-for-Profit Entities (Topic 958): Presentation and Disclosures by Not-for-Profit Entities for Contributed Nonfinancial Assets. The new standard is now in effect for annual periods beginning after June 15, 2021, and interim periods within fiscal years beginning after June 15, 2022.
In a memorandum released in September 2022, the IRS has confirmed that if a PPP loan was forgiven based on misrepresentations or omissions by the taxpayer, the taxpayer is not eligible to exclude the forgiven amount from income. Any portion of the loan proceeds that were forgiven in error must be included in their gross income.
On August 5, 2022, President Biden signed the PPP and Bank Fraud Enforcement Harmonization Act of 2022, which establishes a 10-year statute of limitations for civil enforcement and criminal charges against borrowers who engage in fraud relating to Paycheck Protection Program (PPP) loans.
The COVID-19 pandemic significantly impacted many businesses throughout the country. Fortunately, a lot of assistance was offered to keep business entities afloat and help continue their day-to-day operations. In November of 2021, the Financial Accounting Standards Board (FASB) issued new guidance in their release of ASU 2021-10.
Pennsylvania lawmakers finally reached an agreement this summer to reduce the state’s corporate net income tax (CNIT) rate. With the enactment of House Bill 1342 as a component of the 2022-2023 fiscal year state budget, signed into law by Governor Wolf in early July, the nation’s second highest state corporate tax rate will see a substantial decrease.
Organizations and companies have been exposed to new and different types of risks over the past several months. Many have tested internal controls like never before, and in some cases, demonstrate the need for a more comprehensive strategy. Recognizing the need for financial statement audits to adapt to this reality, AICPA’s Auditing Standards Board has issued SAS 145.
