Source: https://www.spenceraccounting.com/blog/category/all
Timestamp: 2019-04-21 19:10:55+00:00

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​Tax reform’s Section 199A deduction often confuses small-business owners and tax professionals alike. It’s quite possible you’ll get a Schedule K-1 from a business that omits the information you need to calculate your deduction.
He Has Risen! Enjoy This Day with Friends and Family!
IRS has an multi-year plan to modernize IT systems!
In efforts to improve all of our services with the IRS to expand cyber security and update protect our data, the IRS is working on a plan to improve their computerized operations!
Significantly improve the taxpayer experience by standardizing customer workflows and by expanding access to information.
Reduce call wait and case resolution times with customer callback technology, online notices, and live online customer support.
Simplify identity verification to expand access to online services while protecting data.
Increase systems availability for taxpayers and tax practitioners.
Make implementation of new tax provisions more straightforward.
When the Second Office in the Home Is a Principal Place of Business!
Question for you: If you have an office downtown where you spend 40 hours a week, can you claim that you have an office in your home that qualifies as a principal office if you spend only 12 hours a week working in the home office? If you said no, you are not alone. But you would also be wrong.
As the tax filing deadline approaches on April 15, I’d like to thank taxpayers for taking the time to file and pay their taxes. Our nation’s tax system is built around the concept of voluntary tax compliance, meaning citizens comply with their civic duty each year by preparing and filing their taxes – without direct government intervention.
This principle has helped make our tax system a model for the entire world. Thanks to taxpayers, this system helps fund our great nation. Each year, 95% of the gross receipts of our country flows through the IRS – about $3.5 trillion last year – funding critical aspects of the U.S., ranging from roads and schools to the nation’s military.
Behind the scenes, this couldn’t happen without the devoted work of IRS employees across America, in places like Atlanta, Austin, Ogden, Kansas City and elsewhere. We have employees in every state and working in numerous different capacities. Our employees interact with more Americans than any other institution, public or private. They make a difference, they care, and they take great pride in serving taxpayers and our country.
This year, their work has taken on even more importance as we faced the biggest tax law changes since 1986. Our teams labored through two holiday seasons, weekends and many even missed birthdays and family events to ensure IRS filing systems were starting in January 2019.
Due to these efforts, we’ve had a smooth filing season. Our IT systems set a new record in January, accepting more than 1.9 million tax returns in a single hour – that’s 536 tax returns a second. By the time the filing deadline hits more than 130 million tax returns will have been filed, and more than $250 billion in refunds will have been processed – all while helping protect against tax-related identity theft. Efforts to provide quality taxpayer services and protecting taxpayer data will always remain a priority for the IRS.
When taxpayers file their returns, they should feel confident that others are doing the right thing too. Fair but rigorous enforcement of the tax laws is critical to ensuring fairness in our tax system. Our employees who audit returns, collect taxes, and investigate fraud all work hard throughout the year to fairly enforce the laws while respecting taxpayer rights.
As the tax deadline approaches, I want you to know the IRS appreciates the time and personal effort everyone takes to file their taxes in support of our great nation. If someone needs tax help in the coming days, IRS.gov has many options available. And if more time is needed to file, don’t panic – taxpayers can file for an automatic six-month extension.
We sometimes refer to our employees as “IRS Ambassadors” recognizing that they routinely give back to their communities. Many volunteer to help low-income and older Americans prepare their taxes. When disaster strikes, thousands of our employees routinely help answer phone calls for victims calling in to the Federal Emergency Management Agency, provide tax information at Disaster Recovery Centers and lend a hand providing security.
I’m very proud of every IRS employee. They remain dedicated to helping taxpayers understand and meet their filing obligations. Our employees make a difference, and they take pride in serving taxpayers and our country. We’re also hiring people to join our IRS family– if you know someone who may be interested, please suggest they visit usajobs.gov.
Beyond technical skills, the success of the IRS also depends on respecting taxpayer rights and treating everyone we encounter with fairness. My pledge to taxpayers is that we at the IRS will continue to keep taxpayer rights paramount in all of our interactions. Inside our agency, we understand, accept and value our differences, and strive to maintain an inclusive and diverse workplace, where employees treat each other with kindness and civility. We will continue to carry those values with us in all of our dealings with taxpayers as well. We believe every person is important, none more or less so than any others. By valuing and respecting each other, we are better able to move forward together.
Chuck Rettig is the 49th Commissioner of the IRS. He joined the agency in October after spending 36 years as a tax lawyer in private practice.
​A general partner is taxed on partnership income that comes to him or her in the form of guaranteed payments and profit distributions. Profit distributions are qualified business income (QBI) for the Section 199A 20 percent tax deduction. Guaranteed payments and Section 707(a) payments are not QBI.
We Can Help Schedule an Appointment to discuss this with Us!
​When you know the rules, you can party with your employees and deduct 100 percent of the cost. Interestingly, if you feed your employees during a training program, your deduction is only 50 percent. Make sure you know the rules that give you the 100 percent deduction for employee entertainment.
The IRS makes it clear that the above are examples and that other types of entertainment may also qualify for the 100 percent entertainment deduction. The tax code states that “expenses for recreational, social, or similar activities (including facilities therefor) primarily for the benefit of employees” qualify for the 100 percent deduction.
​What does filing an “extension” do?
An extension is a form filed with the IRS to request additional time to file your federal tax return. The extension period is six months, which extends the due date for submitting your final returns from April 15 to Oct. 15.* In some states, filing an extension with the IRS will automatically extend the time to complete a state income tax return.
Extending your return allows us more time to prepare your tax return to ensure filing of an accurate tax return. In many cases, you may still be waiting for additional information (e.g., Schedule K-1, corrected 1099s, etc.) to complete your return.
Why does my Accountant suggest we extend my tax return?
The volume of data or complexity of certain transactions (e.g., sale of a rental property) on your return requires additional time.
The amount of time remaining in filing season is limited for the Accountant to complete client returns by April 15* due to late arriving information.
Your Accountant may suggest filing an extension if there are aspects of your return affected by pending guidance due to tax reform.
​Am I more likely to be audited if I extend?
Extending will NOT increase your likelihood of being audited by the IRS.
It is better to file an extension rather than to file a return that is incomplete or that you have not had time to review carefully before signing.
​Should I do anything differently if I am filing an extension or “going on extension”?
No, you still should give your Accountant whatever information you have as early as possible or as soon as it becomes available.
Expect to pay any anticipated taxes owed by April 15.* You still need to submit all available tax information to your Accountant promptly so they can determine if you will have a balance due or if you can expect a refund.
If you are required to make quarterly estimated tax payments, your first quarter estimated tax payment is due April 15.* Your Accountant may recommend that you pay the balance due for last year and your first quarter estimated tax payment for this year with your extension.
f you are anticipating a large refund, your Accountant will likely try to get your extended return completed as soon as possible once all tax information is available. Your Accountant may also want to discuss tax planning opportunities with you so that in future years, you don’t give the IRS an interest-free loan!
I am missing some information now?
​The federal filing deadline for 2018 returns will be April 15, 2019.
If we haven't received your information we will likely need to file an extension, please contact us as we can't just file without your written consent and other information.
For 2019 the contributions limit for employees and self employed to participate in retirement plans such as 401(k), 457, tsp and 403(b) has increased by an extra $500 to $19,000. Also, IRAs have increased to $6,000 per year which has also increased by $500. This basically equals an extra $500 tax liability saving if you make contributions at the limit.
For those whom are employed and self employed you can contribute to your employers retirement plan ( and you will want to do this to their percentage of match) and your self employment plan. You want to make sure that you are not exceeding the limit in your combined contributions.
For example if you get paid $150,000 per year as an employee and you put 10% of your earnings in your 401(k), then you can only contribute $4,000 from your self employed since your combined contribution can't exceed $19,000 per year!
Your gift from Lawmakers is the new safe harbor for section 199A rental properties. If you qualify you can take it, its there for you to. According to the trade or business rule, your rental property profits can create the deduction. And now, under an alternative rule, you can use the newly created IRS safe harbor to make your rentals qualify for the deduction.
​When you meet the new safe-harbor rules, the IRS deems your rental a trade or business with net rental profits that are QBI for the Section 199A tax deduction. But you may not want to use the safe-harbor rules, because they contain some onerous provisions. Also, you may not qualify to use the safe harbor. No problem. You can simply use the second method and win your 199A tax deduction using the existing trade or business tax law rules.
The IRS has provided some clarity on net capital gains in its section 199A final regulations.
It is possible for Section 199A, the new tax code, may be able to provide your net capital gains with a 20% reduction of your taxable income. The IRS has issued final regulations on Section 199A, along with that clarity they have issued on the capital gains component.
dividends that are taxed at preferred capital gains rates.
Code §179 Property Defined as new or used depreciable tangible §179 property that is purchased for use in the active conduct of a trade or business (Code §179 (d)(1)).
TCJA 2017 modified Code §179, where the deduction limitation has increased, qualified real property expensing has expanded, lodging facility property is now eligible and $25,00 limit on SUV's inflation has been adjusted.
We Now, have covered the actual law for Qualified Real Property Expenditure. Let's shed some light on it!
We can help you with your rental property QBI. Contact us at 262-358-8297 or schedule an appointment online.
Consequently, for taxable income above these thresholds your and you don't have any wages or property your § 199A deduction is zero!
For the purposes of the new Qualified Opportunity Fund, TCJA is not the big bad wolf. In fact, it is a new strategy for tax planning shaped by the tax reform of the Tax Cuts and Jobs Act.
These funds can defer capital gains in the current year, significantly reduce some of them later on, while making capital gains tax-free on the new investment. You will need to strategies to maneuver the new rules and time frames to implement the tax benefits.
to hold the investment for at least 10 years so that the appreciation is tax-free to you when you sell your investment.
Can Kiddie Tax be avoided with Tax Reform?
Thanks to the tax reform of the Tax Cuts and Jobs Act, you have some obstacles to overcome for tax years to 2025.
TCJA tax reform changes the kiddie tax rules to tax a portion of an affected child’s or young adult’s unearned income at the federal income tax rates paid by trusts and estates, which can be as high as 37%.
If this applies to you, tax planning will help mitigate this tax.
Let's Get to the Bag!
If Congress doesn't send a bill to the President approving a spending budget by midnight Friday, most federal agencies will be forced to stop operations, again.
It is expected that bipartisan legislation will be first voted on by the Senate today, then the House where a vote is expected on agreement this evening. The bill then goes to the President for signature Friday morning.
It is unknown exactly how a second shutdown would affect the IRS, filing season, tax preparers and taxpayers. We would expect additional refund delays and staff shortages.
Schedule Your Tax Appointment With us Today!
Betting on loses to offset other taxable Income?
Here is why may not work for you!
The tax reform of the Tax Cuts and Jobs Act (TCJA) has introduced an astonishing threshold to larger business losses that can actually attack your cash flow, ouch!
So, this new law apparently works in some bizarre ways, even though you don’t have a real income for the year. Then you really have some planning opportunities to mitigate the problem when you know precisely how this hideous new rule actually does work.
Your Elected Officials have decided to introduce laws over the years that severely limits your opportunities to counter your business or lease losses to other sources of income.
Limitations that are, in accordance with IRC § 465, the taxpayer's loss deductions are limited to "at risk "amounts in trade or business or income-producing activities.
Limitation on passive loss, which severely limits your passive losses up to your passive income unless an exception applies.
In other words, this relatively new policy is that in the current year, which the new law considers to be an "excess business loss, "you simply cannot use your business loss. "Instead, the excess business loss will be treated as a net operating loss (NOL) for the next taxable year.
When will I get my refund!
According to the Protecting Americans from Tax Hikes (PATH) Act, the IRS cannot issue EITC and ACTC refunds before February 15. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or debit cards on February 27, 2019, if these taxpayers chose direct deposit and there are no other issues with their tax return.

References: §179
 §179
 §179
 §179
 § 199
 § 465