Time to Claim Refunds or Credits for Qualified Transportation Fringe Benefits
Feb 12,2020
The IRS has released instructions for nonprofits to request refunds of tax paid on taxable employee fringe benefits. Why is this being done? The taxation of these fringe benefits was repealed in December 2019, when the Further Consolidated Appropriations Act was passed into law. Included in that spending bill was the Taxpayer Certainty and Disaster Tax Relief Act of 2019, which retroactively repealed the Internal Revenue Code that increased unrelated business income tax (UBIT) for transportation fringe benefits. Originally, under the Tax Cuts and Jobs Act of 2017, amounts paid or incurred after December 31, 2017 for qualified transportation fringe benefits were required to be reported as unrelated taxable income by nonprofits. This included items such as employer-provided parking and public transit passes. Nonprofits that want to claim a refund or credit of the UBIT they reported in 2017 or 2018 will have to file an amended Form 990-T. The...
These Georgia Tax Forms are Only Available Online
Feb 10,2020
This is a public service announcement for taxpayers who may not be aware of a recent change in tax forms. According to information on the Georgia Tax Center (GTC) website, the State of Georgia’s Department of Revenue (GA DOR) is no longer mailing Forms 1099-G to individuals or Form 1099-INT to businesses. Instead, those forms will be available online. Taxpayers are encouraged to sign up with the GTC, which is run by Georgia’s Department of Revenue, as it gives individuals and businesses a safe and accurate way to take care of your state tax needs. Once you are registered, you can view and download your Form 1099-G or 1099-INT. Other services include paying your taxes online, verifying your return, finding out the status of your refund and even protesting a proposed assessment.
Foreign Workers with Certain U.S. Source Income Have New Withholding Regulations
Feb 10,2020
If you hire foreign contractors or workers to do jobs in the United States, withholding on their payment may be required.  Foreign persons can use the appropriate W-8 form to claim treaty benefits which reduce or prevent withholding. If you have a withholding obligation, you should take note of the final regulations published on January 2, 2020 by the Internal Revenue Service (IRS). W-8 forms are used by foreign individuals and businesses to verify their country of residence for tax purposes and certify that they qualify for a lower rate of tax withholding. Form W-8  is submitted to the withholding agents, not to the IRS. The form is kept on file in the event of an audit. Forms are generally valid for several years. Failure to submit the appropriate W-8 form will result in withholding at the full rate of 30%. The new regulations are applicable if you have accepted...
Smith & Howard Named a Top Tax Firm by Forbes
Jan 29,2020
Smith & Howard is honored to have been named one of the Top Tax Firms in the nation by Forbes. In December 2019, Forbes announced its first ever “Best Tax and Accounting Firms” list. The list of the most recommended firms for tax and accounting services in the U.S. was created through a partnership with market research company Statista. Forbes said the 227 firms on the list include businesses of all sizes located across the country. “We are proud to be one of the select firms recommended for our tax services because the recognition comes from our clients and peers,” said Sean C. Taylor, Managing Partner at Smith & Howard. “There are tens of thousands of firms of all sizes offering accounting and tax services nationally, which makes this recognition both humbling and inspiring.” According to Forbes, between August 12 and September 13, 2019, Statista considered 1,800 survey responses from...
What is an IP PIN and Do You Need One?
Jan 24,2020
Identity theft has become a serious problem and fraudsters have used stolen identities to file false tax returns and claim refunds before the rightful filers can do so. Even children’s Social Security numbers are being targeted. The Internal Revenue Service (IRS) created an Identity Protection Personal Identification Number (IP PIN) Opt-In Program to protect taxpayers whose identities had been stolen. Although the program was initially for victims of identity theft, it is being expanded in phases to all taxpayers. The IP PIN is a six-digit number assigned to eligible taxpayers to help prevent the misuse of their Social Security number on fraudulent federal income tax returns. An IP PIN is used only on Forms 1040, 1040PR and 1040SS. There are a number of reasons for signing up for an IP PIN, but also some drawbacks. Data breaches have become prevalent and most of us have our personal information stored somewhere...
IRS Announces Start Date for Tax Filing Season
Jan 05,2020
The Internal Revenue Service (IRS) has announced that it will begin accepting and processing 2019 tax returns on Monday, January 27, 2020.  Individual tax filers will have until Wednesday, April 15, 2020 to file their 2019 tax returns and pay any tax owed unless they choose to file an extension. The IRS has a handy calendar containing an abundance of information and important dates. The IRS is encouraging taxpayers to file electronically as this flags common errors and highlights any missing information. It also encourages taxpayers who are due a refund to opt for direct deposit rather than a mailed check in order to get their refund more quickly.
Congress Repeals Nonprofit Employee Benefits Tax
Dec 31,2019
In 2017, Congress passed the Tax Cuts and Jobs Act. The tax law required associations and other tax-exempt organizations, such as churches, synagogues, hospitals and colleges, to pay a 21 percent unrelated business income tax (UBIT) on employee benefits, such as parking and transportation. Nonprofits grappled with the question of how to calculate their parking tax. The 21 percent tax also applied to mass-transit benefits such as subway passes, though the new regulations focused on parking. The provision was added because the legislation eliminated tax breaks for transportation-related fringe benefits from for-profit companies, and legislators wanted to treat all employers equally. After two years of advocacy by nonprofits to repeal what was considered by many to be a harmful tax, Congress has recognized that nonprofit employee benefits like parking and transit assistance are not a trade or business conducted for the production of income and therefore should not be regarded as...
2019 Tax Law Update: Highlights of Spending Package’s Tax Law Changes
Dec 27,2019
The federal government spending package, titled the Further Consolidated Appropriations Act, 2020, does more than just fund the government. It extends over 30 income tax provisions that had already expired or were due to expire at the end of 2019. The agreement on the spending package also includes the Taxpayer Certainty and Disaster Tax Relief Act (“Disaster Act”) and the Setting Every Community Up for Retirement Enhancement (SECURE) Act. Let’s look at some of the highlights. Extenders Here are some of the most widely relevant breaks that have been extended through 2020: The exclusion from gross income of discharge of qualified principal residence indebtedness; The treatment of mortgage insurance premiums as qualified residence interest for itemized deduction purposes - as part of the efforts to revive the housing market, Congress passed a law allowing a tax deduction for the cost of premiums for mortgage insurance (PMI) for homes and vacation...
Charitable Giving: How to Maximize the Effects and Benefits in 2019
Nov 19,2019
Giving to a charity is not only generous and needed but can bring significant tax deductions. Charitable giving is known as one of the most flexible tax planning tools because your choice of recipients is vast, and you can give at any time of the year (although deductions are based on IRS deadlines). As the holiday season approaches, now is the time to consider your charitable giving options. The Tax Cuts and Jobs Act (TCJA) has essentially doubled the standard deduction and limited or eliminated many itemized deductions (other than the charitable deduction) through 2025. Under current law, itemized deductions are limited to state and local taxes, mortgage interest, charity and certain casualty and gaming losses. For taxpayers with limited mortgage interest and who may be subject to the $10,000 SALT cap, it can take more than $14,000 of charitable contributions before the first dollar is deductible. As a result, some taxpayers...
Kiddie Tax: New Hazards, New Opportunities
Oct 04,2019
Despite its name, the “kiddie tax” is far from child’s play. And a change made by the Tax Cuts and Jobs Act (TCJA) puts some adult teeth into the tax. Now, children with unearned income may find themselves in a tax bracket higher than that of their parents. At the same time, the TCJA creates new opportunities for family income shifting. Income shifting discouraged At one time, parents could substantially reduce their families’ tax bills by transferring investments or other income-producing assets to their children in lower tax brackets. To discourage this strategy, Congress established the kiddie tax in 1986. The tax essentially eliminated the advantages of income shifting by taxing all but a small portion of a child’s unearned income at his or her parents’ marginal rate. When the kiddie tax was first enacted, it applied only to children under 14, but in 2007 Congress raised the age threshold...

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