2018 Year-End Tax Planning for Individuals
Nov 21,2018
Nearly one year later, tax reform is still making headlines and we continue to learn more about its broad implications. Whether your previous tax filing posture was straightforward or complex, you will be impacted by the myriad of changes to the tax code. Now more than ever, it is imperative to thoughtfully consider year-end tax planning opportunities and ensure you are positioned to be in compliance with the new rules. 2018 year-end tax planning begins with a projection of your estimated income, deductions and tax liabilities for 2018 and 2019. You should review actual amounts from 2017 to assist you with these projections. There may be opportunities to accelerate or defer income or deductions to optimize your total tax liability. This Tax Letter is written to help you do just that. Tax planning for individuals also requires consideration of the tax consequences from any businesses conducted directly or indirectly by individual...
2018 Year-End Tax Planning for Businesses
Nov 21,2018
Businesses of all sizes, across all industries, have been impacted by the monumental changes to the federal tax code. To maximize tax savings and ensure compliance with the new rules, businesses need to engage in year-end planning conversations now. Certain tax savings opportunities may apply regardless of how your business is structured, while others may apply only to a particular type of business organization. No matter the type of business entity you operate, year-end tax planning should consider all possibilities to effectively lower your total tax liability. On December 22, 2017, President Trump signed sweeping federal tax reform into law. Tax reform has significantly changed the U.S. tax system for both individuals and businesses. Some of the most impactful measures from tax reform impacting businesses include: The corporate rate was permanently reduced from 35 percent to 21 percent. The availability of cash method accounting has been expanded to small businesses....
IRS Issues Guidance on Meals and Entertainment
Oct 04,2018
Since the Tax Cuts & Jobs Act was passed in late 2017, there has been much discussion about the deductibility of business entertainment expenses. While the TCJA eliminated deductions for business expenses related to entertainment, amusement and recreation activities, one key provision was left in place: businesses are still allowed to deduct 50% of the cost of food and beverages provided during or at entertainment events, if purchased separately from the entertainment or if the cost is stated separately from the cost of the entertainment. In addition, the Act did not eliminate the general 50% deductibility of food and beverage expenses associated with operating a trade or business. Specific tests must be met to maintain deductibility. Those tests include: The expense is ordinary and necessary and paid in carrying on a trade or business; The expense is not lavish or extravagant; The taxpayer or an employee is present when the...
Marc Azar Provides Insights on Uncertainty Regarding the Tax Cuts and Jobs Act
Jul 11,2018
In a recent collaboration with Accounting Today, Smith & Howard Tax Partner, Marc Azar, discussed how CPAs are planning around the recently enacted Tax Cuts and Jobs Act of 2018. “We’re having conversations with all our clients as to the effects of tax reform on their 2018 taxes. It’s enough to get their 2017 taxes done, let alone figure out the implications of the TCJA on their 2018 taxes,” said Azar. To read Marc’s article, Two Tax Seasons at Once, click here.
Department of Revenue Reopens Applications for Georgia HEART Tax Credit
Jul 09,2018
Updated November 15, 2018. The Georgia HEART (Helping Enhance Access to Rural Treatment) program awards Georgia income tax credits to taxpayers who contribute to qualified rural hospital organizations located in Georgia. Much like the Georgia income tax credits for School Scholarship Organizations, the amount available for tax credits is limited and has a filing deadline. The original deadline was June 30, however, the Department of Revenue (DOR) reopened applications on November 15, 2018. The DOR has the authority to reopen applications when it has been determined the aggregate dollar amount donated does not meet the pre-approval cap. You and/or your business may be able to take advantage of these credits. Here’s what you need to know: Items to Note Since the DOR has Reopened Applications: Proposed regulations issued in August 2018 state the deduction must be reduced by the benefit received (credit on state tax). C corporations can get the benefit...
Georgia Changes Tax Credit Process for Companies Performing R&D Activities in the State
Jul 09,2018
Summary On February 7, 2018, the Georgia Department of Revenue released revised regulations on Rule 560-7-8-.42  of the Rules and Regulations of the State of Georgia. These revised regulations, regarding certain filing procedures of the Georgia Form IT-WH Notice of Intent, affect all companies eligible to use Georgia Research Tax Credits to offset their Georgia payroll tax withholding liabilities. Details Background The Georgia Research Tax Credit is available to business enterprises who pay employees or third parties to develop, or try to develop, a product, process, software, technique, invention, or formula, for example, by trying to make it better, faster, cheaper, or greener.  A tax credit is allowed for a business enterprise that has qualified research expenses in Georgia in a taxable year exceeding a base amount, provided that the business enterprise for the same taxable year claim and be allowed a research credit under Section 41 of the IRS Code of 1986, as...
Six Tax Reform Issues Impacting Nonprofit Organizations
Jul 09,2018
The Tax Cut and Jobs Act of 2017 (the “Act”) will have a profound impact on tax-exempt organizations. Even those that don’t report unrelated trade or business income or pay their executives over $1 million may still be affected. Here are the top six tax reform-related issues nonprofits will need to address: 1. Internal Revenue Code (IRC) Section 512(a)(7): Certain qualified transportation fringe benefits, including those relating to parking garages, must be reported as unrelated business income (UBI). All tax-exempt organizations will have to include as unrelated business taxable income (UBTI) any amount paid or incurred for any qualified transportation fringe benefit or any parking facility used in connection with qualified parking. If an organization has a parking garage that offers free parking to its employees, the new law says that the costs paid or incurred by the organization for providing the parking must be included in its UBTI. However,...
Georgia to Require Online Sellers to Collect & Remit Sales Tax
Jul 03,2018
On Tuesday, May 8, 2018, Georgia’s Governor Nathan Deal signed House Bill 61 (HB 61) into law. HB 61 requires online retailers who make at least $250,000 or 200 sales a year in Georgia to either collect and remit state sales tax on purchases or send “tax due” notices annually to customers who spend at least $500 on their sites. The bill provides for collection of sales tax by remote sellers starting January 1, 2019. As we’ve mentioned in our previous updates about the online sales tax case before the U.S. Supreme Court, state and local governments have been clamoring to capitalize on significant online sales tax collections, previously prohibited by a 25-year old ruling by the Supreme Court that nexus determined applicability of sales tax collection. Passage of HB 61 is a preemptive move by the state, and correlates to our previous alerts discussing “accelerated timetables” for state implementation of...
November 17th Tax Reform Roundup Update
Jun 11,2018
On November 16th, the “Tax Cuts and Jobs Act” tax reform bill was passed by the House of Representatives, making its way to the Senate Finance Committee. That evening, the Senate Finance Committee approved its tax bill, sending it to the full Senate where consideration of a tax reform bill is not expected until after Thanksgiving. Here are the key provisions of the House tax bill:Key Business Provisions of the House BillCut corporate income tax rate from 35% to 20% and repeal Alternative Minimum Tax (AMT) - both beginning in 2018Modify the current worldwide taxation system to exempt from US tax dividends from foreign subsidiaries from foreign earnings and tax on a current basis potentially significant amounts of foreign incomeImpose a one-time 14% tax on accumulated foreign earnings, reduced to 7% for illiquid assetsAllow businesses to expense the cost of certain new property placed in service after September 27, 2017,...
The End of the Internet Tax-Free Zone?
Apr 09,2018
With South Dakota vs. Wayfair on the docket for the Supreme Court this month, the Court is expected to agree with South Dakota that it is time for the internet sellers to operate like brick & mortar stores and collect sales tax on all sales. However, there has been growing noise from some politicians and retailers opposing the possible decision. Click here to read a brief overview on the South Dakota vs. Wayfair case. For some politicians, they believe the determination of sales tax collection is a legislative matter. The Washington DC publication, The Hill, wrote on April 4: “A group of lawmakers that includes House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and Senate Finance Committee ranking member Ron Wyden (D-Ore.) said in their brief that ‘it is for Congress — not the Solicitor General, this Court, or the States — to decide the best interstate taxation scheme for Internet sales’.” If the Supremes rule...

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