When a business generates income from foreign sources, retains an interest in a foreign company, or has a foreign tax interest, additional IRS filings must be filed. This is especially true for pass-through entities (PTEs) such as partnerships, S-corporations, or limited liability companies (LLCs). Specifically, these companies are required to file Schedule K-2 and K-3.
In late November 2022, the IRS announced the interest rates that will go into effect for the first quarter of 2023, which begins January 1, 2023. The new rates, which have increased over the previous quarter, will be….
The Tax Cuts and Jobs Act of 2017 made several favorable tax changes that provided meaningful benefits to businesses. Unfortunately, there were also changes that had an adverse impact on the same taxpayers. One important example is the $10,000 cap on the deduction for state and local taxes. Unfortunately, this modification created tax complications for owners of S-corporations, partnerships, and other pass-through entities. Essentially, it forced more of the tax burden on the individual tax returns of owners.
In Notice 2022-55, released on October 21, 2022, the IRS announced the changes coming to retirement-related items for the tax year 2023. These include contribution limits, income ranges, and cost-of-living adjustments. The contribution limit for 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan is increased to $22,500, up from $20,500. The catch-up […]
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.
