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Tax Reform 2.0 2018 Post-Filing Season Update Congress Approves Sweeping Tax Overhaul Tax Cuts and Jobs Act

Proposed Regs. Limit Charitable Contributions Made to Avoid SALT Deduction Limit
An individual, estate, and trust generally must reduce the amount of any charitable contribution deduction by the amount of any state and local tax (SALT) credit he or she receives or expects to the r...

Proposed Regulations Provide Guidance on GILTI Inclusion
Much-anticipated proposed regulations provide guidance for U.S. shareholders determining the amount of global intangible low-taxed income (GILTI) to include in gross income. The Tax Cuts and Jobs Act ...

Interim Guidance Provided for Exempt Organizations with Multiple Unrelated Businesses
Interim guidance and transition rules have been released regarding the special rule requiring exempt organizations that have unrelated business taxable income from operating more than one unrelated bu...

IRS Provides Guidance on What Constitutes a Covered Employee
Taxpayers can rely on new guidance related to the limitation on the deduction for employee compensation in excess of $1 million. Specifically, the guidance addresses:the definition of a covered employ...

Qualifying Relative Definition Still Uses Inflation Adjusted Exemption Amount
The IRS clarified who is a "qualifying relative" for the new $500 dependent credit and head of household filing status for tax years 2018-2025. The new rules will continue to use the inflati...

Moving Expense Reimbursements Incurred Before 2018 Are Excluded
Employer payments or reimbursements in 2018 for employees’ moving expenses incurred prior to 2018 are excluded from the employee’s wages for income and employment tax purposes.The Tax Cuts...

Six-Year Spread Applies to 481(a) Adjustments After Terminated S Corporation’s Accounting Method Change
New temporary rules clarify a six-year spread period for Code Sec. 481(a)adjustments after an eligible terminated S corporation changes from a cash to an accrual method of accounting. These rules...

North Carolina Victims of Hurricane Florence Granted Tax Relief
President Donald Trump has declared a federal disaster area in North Carolina. The disaster is due to Hurricane Florence, which began on September 7, 2018.The disaster area includes the following coun...

IRS Releases Guidance for Section 199A Pass-Through Deduction
The IRS has released long-awaited guidance on new Code Sec. 199A, commonly known as the "pass-through deduction" or the "qualified business income deduction." Taxpayers can re...

Regulations Issued on Partnership Representative Under Centralized Partnership Audit Regime
The IRS has issued final regulations regarding the designation and authority of the partnership representative under the centralized partnership audit regime. The final regulations make a number of ch...

Proposed Rules Address 100-Percent Depreciation Deduction
Proposed regulations address the new 100-percent depreciation deduction that allows businesses to write off most depreciable business assets in the year they are placed in service.BackgroundThe Tax Cu...

Regulations Proposed on Code Sec. 965 Transition Tax
Proposed regulations provide rules for determining the Code Sec. 965 inclusion amount of a U.S. shareholder of a foreign corporation with deferred foreign income. The tax imposed on the incl...

IRS Replaces Proposed Rules on Partnership Audit Regime
The IRS has released proposed regulations governing the centralized partnership audit regime. These regulations replace some existing proposed rules to reflect changes made by the Tax Technical Correc...

Short-Term Health Insurance Exemption from ACA Consumer Protections Broadened
The Departments of Health and Human Services, Labor, and Treasury have amended the definition of short-term, limited-duration individual health insurance coverage, by allowing such coverage to last up...

Hardest Hit Fund Safe Harbor Modified
The IRS has modified the safe harbor for computing deductible mortgage interest under Code Sec. 163 and real property taxes under Code Sec. 164(a)(1) by homeowners participating in...

IRS Extends Filing, Payment Deadlines for California Wildfire Victims
The IRS has extended filing and payment deadlines for certain California taxpayers affected by wildfires. Taxpayers in Shasta County may qualify for tax relief.Extended DeadlinesIndividuals and busine...

Discharge Relief Available for Private Student Loan Debtors
The IRS has provided relief to taxpayers who took out private student loans to finance attendance at a school owned by Corinthian College, Inc. (CCI) or American Career Institutes, Inc. (ACI). Under t...

Small Businesses Get Automatic Consent for Accounting Method Changes
The IRS will provide automatic consent to a small business taxpayer’s application to change to the cash method of accounting. Eligible small business taxpayers, as defined by the Tax Cuts and Jo...

Exempt Organizations May Not Need to Include Donor Information on Returns
Tax-exempt organizations, other than charities exempt under Code Sec. 501(c)(3), will soon be able to stop reporting the names and addresses of contributors on Schedule B when filing their inform...

IRS Unveils Draft Form 1040
Taxpayers will be able to file federal income taxes starting next filing season on a new postcard-sized Form 1040. The IRS officially released the draft 2018 Form 1040 on June 29.Draft Form 1040The ne...

Preparer Due Diligence Rules Include Head of Household Eligibility
The IRS has proposed amendments to the tax preparer due diligence regulations to reflect a recent law change. The Tax Cuts and Jobs Act ( P.L. 115-97) expanded the scope of the due diligence pena...

IRS Clarifies Estate and Trust Expenses Not Subject to Miscellaneous Itemized Deduction Suspension
The Treasury Department and the IRS plan to issue regulations clarifying that certain estate and nongrantor trust expenses remain deductible and are not subject to the miscellaneous itemized deduction...

Veterans Urged to Claim Refund for Tax Overpayments on Disability Severance Payments
The IRS has urged certain veterans who received disability severance payments after January 17, 1991, and included that payment as income that they should file Form 1040X, Amended U.S. Individual Inco...

IRS Highlights “Security Six” Safeguards
The IRS, along with Security Summit partners, offered important tips dubbed "Security Six"protections to help tax professionals protect their computers and email as well as safeguard sensitive ta...

ME - Guidance on conformity legislation released
Maine now generally conforms to federal tax law changes enacted through March 23, 2018. This is the result of recently enacted state legislation.Amended Returns May Be RequiredSome taxpayers may be re...

MA - Merrimack valley explosions extension available
Taxpayers affected by the gas explosions have been granted filing and payment extensions for Massachusetts state tax purposes.Payment and Filing Extension Dates and AreasThe Massachusetts Department o...

NJ - Information on charges for rentals of transient accommodations revised
Information provided on New Jersey sales tax and hotel/motel occupancy fees and assessments on charges for rentals of transient accommodations is revised. The revision includes:clarification of the ex...

NY - Assessments upheld for failure to prove change of domicile
A taxpayer was liable for New York personal income tax because he failed to prove that he had abandoned his domicile for the tax years at issue. In this matter, the taxpayer was assessed additional ta...

PA - Taxability of sale of Malt or brewed beverages by manufacturers discussed
The Pennsylvania Department of Revenue has issued a bulletin discussing the applicability of sales and use tax to the sale of malt or brewed beverages by manufacturers. The bulletin, effective January...

VT - MFTIA and MFTA rates announced for fourth quarter of 2018
Vermont announced the motor fuel transportation infrastructure assessment (MFTIA) and motor fuel tax assessment (MFTA) rates for October-December 2018.MFTIA Rate IncreasedThe MFTIA rate increased from...

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