Section 403(b) of the Internal Revenue Code of 1986, as amended (the "Code") authorizes a type of retirement plan that can be sponsored by certain tax exempt organizations (e.g., a Code Section 501(c)(3) organization, including a church), certain educational organizations (as described in Code Section 170(b)(1)(a)(ii), including colleges), and certain state or local governmental organizations. In many cases, a 403(b) plan's assets are held in either annuity contracts or custodial accounts (with participant direction of the investments) which may limit the plan sponsor's ...
The IRS recently announced it will be shutting down its successful Offshore Voluntary Disclosure Program (OVDP) for unreported foreign bank accounts and income. The program will end September 28, 2018. Under the OVDP, first started in 2009, over 50,000 individuals have come forward to report previously unreported foreign bank accounts and income. The IRS reports it has raised over $11 billion in taxes, penalties and interest through the OVDP.
The U.S. income tax system is perhaps the most expansive in the world. U.S. citizens and permanent residents must report their worldwide ...
The IRS requires businesses to obtain a Form W-4 from each employee, and also a Form W-9 from contractors and others who may receive payments for services. If a business does not receive these forms, the business must deduct and withhold “back-up withholding” from all wage and other payments to these individuals equal to 24% of the payments (down from 28% prior to 2018). Amounts withheld from an employee/contractor’s payments as back-up withholding are reported on Forms W-2/Form 1099 by the business, and should be reported as federal income tax withheld on the ...
UPDATE: In Notice 2018-18, published March 1, 2018, the IRS announced its intention to issue regulations clarifying that S corporations will be subject to the extended carried interest holding period.
Prior to the passage of the Tax Cuts and Jobs Act (the "Act"), one of the more controversial and hotly-debated tax benefits was the so-called "carried interest," which allowed certain fund managers and venture capital firms to pay income taxes on what would typically be considered ordinary income at favored long-term capital gains rates. Both Presidential candidates took aim at the ...
An IRS tax levy is a seizure of a person’s property or rights to property. The IRS then uses the seized property to pay taxes owed. A levy allows the IRS to confiscate a person’s property, which includes cars, boats, real estate, and other “tangible” property. The IRS can also levy and take a person’s wages, bank accounts, and retirement income including Social Security benefits.
The IRS has been authorized to impose levies since 1954. Generally, the IRS must wait at least 10 days from the date it sends a notice of intent to levy before it can make a seizure. This notice must inform ...
Under the Tax Cuts and Jobs Act, Congress is now offering a new 20% deduction for "pass-through" businesses - i.e. businesses that are not corporations. With the corporate tax rate being reduced under the new law to a flat 21%, the 20% deduction for other forms of businesses was designed to give a reduction to these businesses approximating the lower corporate tax rate. If applicable, the 20% deduction can be claimed by the owners of S corporations, partnerships, sole proprietorships, and even the beneficiaries of trusts. These are business entities that do not pay income tax at the ...
At the end of 2017, President Trump signed into law a sweeping and comprehensive overhaul of the U.S. tax system. The Tax Cuts and Jobs Act includes significant changes for business owners. We invite you to attend a special seminar, led by McNair's Tax Practice Group Leader, Erik Doerring, who will discuss these changes and how they will affect you and your business. Topics will include:
- Corporate tax changes/reductions
- Individual tax changes
- The new 20% deduction for pass-through businesses
- Potential business restructuring to take advantage of the new tax cuts
Join us as we break ...
The new federal tax law, known as The Tax Cuts and Jobs Act, that was approved by Congress and signed into law at the end of 2017, creates a benefit for individuals paying tuition for children in private or religious schools in grades Kindergarten through 12th grade. 529 Plan funds were only allowed for qualified education expenses, which was previously limited to higher education tuition, room and board, books, computers and software, but NOT for tuition for elementary through high school. The new law has added tuition for private and religious K-12 schools as an approved qualified ...
On January 22, 2018, President Trump signed into law H.R. 195 (hereinafter referred to as the "2018 Budget Deal") which ended the federal government shutdown and funds the federal government through February 8, 2018. In addition, the 2018 Budget Deal included a six-year funding extension to the Children's Health Insurance Program. The 2018 Budget Deal also contains a two year delay to the effective dates of the "Cadillac Tax", the medical device excise tax, and an annual fee on health insurance providers. This blog will review the two year delays to the above-referenced taxes and ...
Aside from corporate tax reductions, one of the most important aspects of the new Tax Cuts and Jobs Act beginning this year is the new 20% deduction for “pass-thru” businesses – i.e. businesses that are not corporations. With the corporate tax rate being reduced to a flat 21%, the 20% deduction for other forms of businesses was designed to give a reduction to these businesses approximating the lower corporate tax rate. However, this 20% deduction, found in new Internal Revenue Code § 199A, is saddled with exclusions, phase-outs, technical issues, and uncertainties so that many ...