Impact of Tax Reform on Current Year Financial Statements
Most of the provisions in the newly passed Tax Cuts and Jobs Act (“Act”) are effective for years beginning after December 31, 2017. However, Accounting Standards Codification (“ASC”) 740 (Accounting for Income Taxes) takes a balance sheet approach, requiring tax-related assets or liabilities existing as of the date of enactment to be revalued at the future reversal tax rate. Revaluing Deferred Tax Assets and Liabilities Beginning January 1, 2018, the federal corporate tax rate moves from being a progressive rate (with most companies previously subject to a 34 percent or 35 percent rate) to a flat 21 percent rate. According. Read More.
Top Tax Changes for Nonprofits and Education in the New Tax Bill
Sweeping tax reform has been enacted with most provisions being effective for years beginning after December 31, 2017. This means calendar year taxpayers have mere days to take action, where possible, to mitigate the effects the new law may have on them in 2018. Several provisions affect exempt organizations directly, while other provisions will be felt through the impacts the new tax law has on donors and employees. The legislation is complex and will likely need interpretation, since we aren’t sure how long we’ll have to go without official guidance from the IRS. For a quick rundown of what did and. Read More.
Look out for ACA Penalty Letters from IRS
The Internal Revenue Service (“IRS”) is sending penalty letters to certain large employers as the first step in enforcing the employer shared responsibility provision in the Affordable Care Act (“ACA”). These Letters 226-J are for 2015, the first year for which the penalty will be assessed. The employer shared responsibility provision states that applicable large employers (“ALEs”) must choose one of two options: Offer affordable health coverage that provides minimum essential coverage to full-time employees and their dependents, or Make an employee shared responsibility payment (“ESRP”) to the IRS for any full-time employees who receive a premium tax credit for. Read More.
Top 5 Things You Need to Know about Changes to Partnership Audit Rules
On November 2, 2015, Congress passed the Bipartisan Budget Act (“BBA”). The BBA established a new partnership audit regime and entirely repealed the current partnership audit rules under the Tax Equity and Fiscal Responsibility Act (“TEFRA”) and the electing large partnership rules. Among other things, the new rules greatly enhance the ability of the Internal Revenue Service (“IRS”) to audit partnerships by allowing the IRS to make assessments against and collect taxes from the partnership itself. As a result, the new rules, which take effect for partnership taxable years beginning on or after January 1, 2018, will have significant implications. Read More.
How to Read Both Versions of the Tax Cuts and Jobs Act
Now that America has seen the House’s version of the Tax Cuts and Jobs Act (“the bill”), which passed on November 16, and the Senate’s version of the bill, we’re getting a clearer picture of where policymakers agree and where there’s still plenty of room for negotiations. The real questions that still remain are: What will the final bill actually look like by the time it is ready to be signed into law? Will a final tax bill be passed before the end of 2017? How will this impact year-end tax planning for 2017? What actions will taxpayers need to. Read More.
Survey Reveals Innovative Businesses Are Missing out on Tax Incentives
Many businesses large and small are missing out on “free money” from government sources – money that could fund their innovation and expansion efforts – according to the 2017 Washington Business Journal Metro DC Poll Innovation Survey, just released in September 2017. In this same survey, when asked what are their top barriers to innovation, 26 percent of respondents said financial resources (or the lack thereof), making it the second highest barrier in the survey. If having the financial resources to fund innovation, development and expansion is such a huge issue for businesses throughout the D.C. metro area (including areas. Read More.
All Defined Benefit Plans are NOT Created Equal
Frustrated by the limitations of cash balance plans? Worried about the risks associated with cash balance plans? Consider a Direct Recognition Variable Investment Plan (DR-VIP) from Cherry Beakert Benefits Consulting and reap the benefits. Plan Features DR-VIP Cash Balance Plans Maximum Contribution Per Person $300,000 +/- $300,000 +/- Tax Deductible Contributions Tax Deferred Accumulations Contribution Certainty Optional Auto-Adjust Contributions No Underfunding Liability No Overfunding Direct Recognition No Crediting Limitations Daily Valuation Fully Automated Would you like to: Maximize partner benefits? Minimize additional staff costs? Eliminate underfunding risk? Maximize investment flexibility? See how it works by viewing this short case study . For more. Read More.