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The Department of the Treasury and the IRS proposed regulations this week that would clarify the relationship between state tax credits and federal rules regarding charitable contribution deductions.  Under the proposed regulations, a taxpayer’s allowed federal charitable contribution deduction would be required to be reduced by the amount of any state or local tax (SALT) credit received by the taxpayer for the contribution.  For example, if a taxpayer makes a $10,000 contribution to a charitable organization and receives a $6,000 … Continued

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The new tax law has created a method of tax savings by providing tax benefits to taxpayers who reinvest capital gains into vehicles called Qualified Opportunity Funds.  These funds hold at least 90% of their assets in Qualified Opportunity Zone Property, which is property in low-income communities.  If taxpayers take advantage of this opportunity by investing in these funds by 2021 and holding them for at least five years, the law allows them to increase their basis in the initial … Continued

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This month, the IRS will begin implementation of new procedures affecting individuals with “seriously delinquent tax debts.” These new procedures implement provisions of the Fixing America’s Surface Transportation (FAST) Act, signed into law in December 2015. The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt. See Notice 2018-1. The FAST Act also requires the State Department to deny their passport application or deny renewal of … Continued

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Layman’s version of Deduction for Qualified Business Income of an Individual under Sec. 199A   The Qualified Business Income tax deduction gives the owners of pass-through businesses like sole proprietors, partnerships, S corporations and real estate investors a deduction equal to 20% of qualified business income.   What is Qualified Business Income?   The qualified business income includes the profit from an active trade or business and then also rental income as long as you operate as a pass-through entity.   … Continued

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‘Tis the season of employee rewards and bonuses. Below is a quick guide for the tax consequences of gift giving:   Bonuses   Year-end bonuses are subject to the same payroll taxes that an employee’s normal pay is subject to. This includes all federal and state withholding requirements and the employee’s share of FICA taxes (which includes social security and Medicare). Bonuses are considered to be “supplemental wages” by the IRS and are subject to special withholding rules. See IRS … Continued

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An employee stock option is a contract that gives employees the right to buy a certain amount of the company’s stock at a predetermined exercise price after a specified vesting period. The exercise price is normally the fair market price of the stock at the time the option is granted, and the option is typically exercisable for a certain period of time.   Incentive stock options are a form of qualified stock options that are granted to an employee by … Continued

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Previously, the IRS announced that they were testing new expanded criteria for streamlined installment agreements. This expanded criteria allowed previously unqualified taxpayers to qualify for the streamlined process. This test was set to run through September 30, 2017. The IRS has now extended the testing period to run through September 30, 2018. This is good news for taxpayers and businesses hoping to settle past tax liabilities in a quick and efficient manner. On the IRS website, they state that, “One … Continued

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In a recent Revenue Procedure, the IRS has provided a permanently available simplified method for estates to obtain an extension of time to make the estate tax portability election. The simplified method is only available to estates that are not required to file an estate tax return based on the value of the gross estate and is effective June 9, 2017.   Background—portability election. In simple terms, portability of the federal estate tax exemption between married couples means that if … Continued

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If signed by the Governor, individuals who contact the Oklahoma Tax Commission after September 1, 2017 and before November 30, 2017 can make arrangements with the O.T.C. to pay the principal portion of taxes owed and a small user fee in exchange for a automatic waiver of penalties and interest. The program, as written, will cover income taxes, sales taxes, use taxes, withholding, mixed beverage, gasoline, diesel, gross production taxes, and petroleum excise taxes. Enrollment in this program is highly … Continued

Qualified Charitable Distributions
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The tax code permits “qualifying charitable distributions” from traditional IRA or Roth IRA accounts to be excluded from gross income. It is a powerful incentive to charitable giving, and through the use of life insurance, the ultimate amount the charity receives can be substantially increased.   What is a “qualifying charitable distribution”?   The requirements are relatively simple. The charitable distribution must be: • From a traditional IRA or a Roth IRA; • Direct from the IRA trustee to the … Continued