While many changes in the Tax Cuts and Jobs Act (TCJA) involved rewriting entire sections of the tax code, some of the most consequential changes resulted from a simple change in definition. By expanding the definition of a “small business,” the law enabled many companies to simplify their tax preparation—and often improve their cash flow as well. (more…)
Beware of the New Tax Law’s Impact on Trust and Estate Income
In this podcast, Chris Madrid from our Family Wealth and Individual Tax Planning Group discusses important modifications the Tax Cuts and Jobs Act made to the income taxation of trusts and estates for 2018 and beyond.
Rental Real Estate and the Section 199A Deduction
By Rachel Gillespie, CPA, Tax Principal
ASL Real Estate Group
In December of 2017, the Tax Cuts and Jobs Act was enacted by Congress, which gave us the most sweeping and dramatic changes to the Internal Revenue Code in more than 30 years. The Act created the Internal Revenue Code Section 199A deduction which has the potential to help taxpayers reduce their liabilities with a 20% deduction against their “qualified business income”. Section 199A provides individual taxpayers and certain trusts and estates a deduction for qualified business income from a partnership, limited liability company, S-corporation, sole proprietorship, trust or estate. The deduction applies to tax years beginning after December 31, 2017 and before January 1, 2026. (more…)
Tax Reform…. Not in California
UPDATED JULY 18, 2019: At Last…Partial Conformity…
In December 2017, Congress passed the Tax Cuts and Jobs Act (TCJA) which was the most significant tax reform legislation enacted since the 1980s. In July 2019, 18 months later, the California legislature acted and the governor signed Assembly Bill 91 that contained a select number of conformity provisions. These provisions will simplify tax compliance for California taxpayers as differing federal and California tax reporting for certain transactions will no longer be required. Unfortunately, California has yet to conform to most of the changes enacted by the TCJA.
The conformity changes included in AB 91 are highlighted below.
However, in an act of “reverse conformity,” the legislature passed Senate Bill 78. Originally, the federal Affordable Care Act imposed a “penalty tax” on taxpayers who did not have qualifying health insurance coverage. Congress repealed this “tax” effective January 1, 2019. But due to an act of reverse conformity, a “penalty tax” will once again be imposed on California taxpayers that do not have qualifying health insurance, effective January 1, 2020. (more…)
Beware of the New Tax Law’s Impact on Trust and Estate Income
By Christine Collins Madrid, CPA, Tax Director
ASL Family Wealth & Individual Tax Planning Group
The Tax Cuts and Jobs Act (TCJA), signed into law in December 2017, made important modifications to the income taxation of trusts and estates for 2018 and beyond. Trust and estate income tax rates and brackets changed, along with deductibility of some estate and trust administrative expenses. Also, a new qualified business income deduction is available, under certain circumstances, that could be as much as 20% of qualified business income. (more…)
Meals & Entertainment Deduction Changes
With all of the changes to the meals and entertainment deduction under the new tax law, we thought we would summarize the rules in this handy table. Please reach out to us if you have questions. (more…)
Year-End Tax Planning Ideas
Now is the time to think about tax saving strategies that can be implemented before the end of the year. The Tax Cuts and Jobs Act passed by Congress in December 2017 will significantly impact year-end tax planning for 2018. Several traditional tax saving ideas are no longer effective and many new opportunities are available. Some our favorite ideas are discussed below. (more…)
Qualified Opportunity Funds...an Opportunity for Tax Savings
By Abe Livchitz, CPA, Senior Tax Manager & Tingting Zhang, CPA, Tax Senior
Tax deferral, gain exclusions, tax free appreciation. These seven words are very exciting as they offer potentially significant tax savings for our clients. All three of these benefits are possible by investing in a “Qualified Opportunity Fund” (QOF). The creation of these funds and their related tax benefits were authorized by the Tax Cuts and Jobs Act (TCJA) passed by Congress in December 2017. The Internal Revenue Service recently issued guidance to clarify questions unanswered by the TCJA, so QOFs should gain in popularity in the coming months. However, additional guidance is expected in the future, as many questions remain unanswered. (more…)
Charitable Giving in a Post-TCJA World - What You Need to Know in the Wake of the New Tax Law
The Tax Cuts and Jobs Act (TCJA) represents the biggest overhaul of the tax code in more than three decades. Tax experts are still sorting out all the intricacies. But this much is clear: The TCJA will have a significant impact on estate planning and related aspects, such as charitable giving.
Even though the TCJA reduces tax incentives for making charitable donations for some people, it encourages contributions for others. Let’s take a closer look at the new tax landscape and how it relates to charitable giving. (more…)