With the passage of the Tax Cuts and Jobs Act of 2017 (“TCJA”), many itemized deductions previously available to taxpayers were either limited or eliminated. Due to the significant increase in the standard deduction, many taxpayers have abandoned the task of accumulating expenses once allowed to offset taxable income as an itemized deduction.
One previously obscure section of the Internal Revenue has gotten renewed interest in recent years and it could mean significantly lower taxes for you. Policymakers have long sought to encourage investment in small businesses and one of the strongest incentives that Congress has enacted is Internal Revenue Code (IRC) Sec. 1202.
Governor Kemp ended Georgia Small Business Week by signing HB 1058, which permits affiliated corporations in Georgia to elect filing a consolidated income tax return for tax years beginning on or after January 1, 2023.
The cybersecurity landscape is rapidly becoming more challenging as the pace of attacks on organizations increases and new threats emerge. An increasing reliance on remote work necessitated by the COVID-19 pandemic has only added to these challenges.
On March 28th, the Treasury Department released details of the administration’s tax related budget recommendations for FY2023, commonly referred to as the “Green Book”. They contain recommendations from the administration to Congress for forthcoming tax legislation.
Effective for tax years beginning after December 31, 2021, the Tax Cuts and Jobs Act (“TCJA”) of 2017 changed the treatment of Internal Revenue Code (“IRC”) Section 174 costs requiring that Research and Development (R&D) costs be capitalized and amortized over a period of 5-years for domestic expenses and 15-years for offshore expenses. Although many hoped that this unfavorable provision from the TCJA would be postponed or removed prior to December 31, 2021, the change remains in effect in 2022.
The Tax Cuts and Jobs Act (TCJA) permanently eliminated deductions for most business-related entertainment expenses paid or incurred after 2017. For example, taxpayers can no longer deduct any of the cost of taking clients out for a round of golf, to the theater or for a football game. Taxpayers responded to these changes by implementing changes to accounting systems and reimbursement policies to comply with new rules. But the TCJA didn’t specifically address the meals, beverages and snacks that often accompany entertainment activities, leaving some taxpayers with questions.
In most tax jurisdictions, debt is viewed more favorably than equity as interest is typically deductible while dividends are not. To combat this strategy, many tax jurisdictions will impose restrictions on the deductibility of interest. The US has rules that limit business interest deductions and these restrictions are tightening in 2021.
In any real estate, acquisitive or restructuring transaction, legal fees and other consultant fees can become a substantial cost during the deal. IRS regulations outline several limitations on deductibility, so it is important to understand these limits and potential exceptions to capitalization to maximize the “after-tax” dollars spent on legal fees and other transaction costs.
Bennett Thrasher is proud to celebrate global independent accounting association DFK International’s 60th anniversary. We are proud to have been a member of DFK International for 21 years – an association which benefits both our firm and our clients.
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