UPDATE January 13, 2023 – The FTB announced that California will conform to the filing extensions granted by the IRS for California storm victims. For additional information, please see the news release issued by the FTB: California Grants Tax Relief for Those Affected by the Recent Winter Storms
Due to the recent and continuing floods and storm damage, many counties have been declared disaster areas by FEMA. On January 10, 2023, the IRS used its authority (IRS Announces Tax Relief for Victims of Severe Winter Storms, Flooding, and Mudslides in California) to grant taxpayers living in or having a business in the impacted counties a deferral until May 15th for making tax payments, filing returns and taking certain time-sensitive actions normally due after January 10th. (more…)
Since the 2017 Tax Cuts and Jobs Act (TCJA) put a limit on itemized deductions for state and local taxes (SALT), states with relatively high tax rates have been looking for ways to work around the limit. One widely used approach can lessen the impact of the SALT deduction cap for some taxpayers, but it also creates complications for businesses. (more…)
Categories: Uncategorized
Although its official name is the Inflation Reduction Act of 2022, this wide-ranging tax and spending measure that was signed into law in August might be more accurately described as an energy-related tax incentives act. The new law, commonly referred to as the IRA, contains more than $270 billion in energy- and climate-related tax incentives, including 11 new programs to encourage businesses and individuals to produce and use clean or renewable energy. It also extends or expands another 14 energy-related tax incentives. (more…)
By Deepa Bhat, CPA, CFE, ACA, Assurance & Advisory Principal
ASL Construction Group
It’s been a while since we’ve had a deep dive article on work in progress (WIP) schedules (to refresh your memory, see Red Flags on a Contractor’s Work in Progress Schedule). As I review the WIP schedule for a new client, I find myself referring to this article for all the recommendations I’d like to make to this client. A few additional observations are noted below: (more…)
By Amy Whitcomb Price, CPA, MST, Tax & Advisory Director
ASL Real Estate Group
The Inflation Reduction Act (IRA), which includes expanded or extended tax credits, was signed into law on August 16, 2022. The bill has been championed as a “climate change bill”, with many provisions specifically focused on direct consumer incentives to buy energy-efficient appliances, clean vehicles, rooftop solar systems, and invest in home energy efficiency. The bill provides a great opportunity for homeowners to make their homes more eco-friendly while receiving cash incentives from the government to do so. The bill includes: (more…)
For investment businesses—including many private equity, venture capital, real estate, and hedge fund partnerships—new rules governing the taxation of “carried interest” have been a source of concern for several years. The Tax Cut and Jobs Act of 2017 changed the way such income is to be reported and taxed, but 2022 is the first year in which the final regulations implementing those changes take full effect. (more…)
The ability to deduct research and development (R&D) costs as a current business expense, rather than treat them as a capital asset that must be amortized over time, has helped many businesses over the years. By enabling companies to lower their income tax burden, this tax treatment encouraged valuable research and technological innovation. (more…)
The Inflation Reduction Act, enacted in August 2022, significantly changed the qualifications for and calculation of the tax credit available for the purchase of an alternative fuel vehicle (electric and fuel cell vehicles). The Act created the Clean Vehicle Credit with one provision effective upon enactment and the remaining provisions phased in beginning in 2023. As a result of enactment, many vehicles that previously qualified for the credit earlier in 2022 no longer qualify. Significant changes and their effective dates are discussed below. (more…)
Many businesses form wholly owned captive insurance companies for legitimate risk management purposes and to take advantage of potential tax savings. Unfortunately, some promoters of so-called “microcaptive” schemes have run afoul of the IRS by helping businesses set up captive insurers solely to evade federal income taxes.
If your business is considering forming a microcaptive insurance company to reduce its tax burden, you should consult with a qualified, objective tax professional before taking any action. The penalties for illegal tax-avoidance schemes can be severe, and the IRS has been quite successful in pursuing such cases in recent years. (more…)
