Tax Warrior Chronicles

New Partnership Tax Capital Reporting May Prove Problematic

Posted on Mon, Nov 23, 2020

By: Chris Catarino, CPA, MT and Joseph Criscuolo, CPA, MT

 

On October 22, 2020, the IRS released draft instructions to Form 1065, U.S. Return of Partnership Income, for the 2020 tax year. The draft instructions provide additional clarity on the new tax capital reporting requirements partnerships will face this upcoming filing season. Partnerships that have not previously tracked partners' tax capital accounts, especially older partnerships, will face significant challenges complying with these new rules.

 

We previously blogged about this topic in March 2019, when the IRS first attempted to impose these new reporting requirements on 2019 partnership tax returns, but ultimately delayed the

Read More

PPP Update #18 – Further Clarity on Deductibility of Expenses

Posted on Fri, Nov 20, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates #1, #2#3#4#5#6#7,#8,#9,#10, #11, #12,#13, #14, #15#16#17

 

On November 18, 2020, the IRS released Revenue Ruling 2020-27, amplifying Notice 2020-32, and simultaneously issued Revenue Procedure 2020-51. Both provide further clarity on deductibility of expenses paid with Payroll Protection Plan (PPP) funds and, not surprisingly, leave us with more unanswered questions.

 

In PPP Update #7, we discussed Notice 2020-32. The Cliffs Notes version is any expenses paid with PPP funds that are ultimately

Read More

Unprepared Heirs: Starting the Family Conversation About Wealth Transfer (Updated)

Posted on Thu, Nov 19, 2020

In these challenging and uncertain times, planning for generational wealth transfer is more important than ever.  We've updated this piece from 2018 to, again, help families discuss wealth among themselves and how it will successfully pass from one generation to the next. 

 

The reports differ from $30 trillion to perhaps only $9 trillion, but nearly all experts agree the greatest wealth transfer in history will happen in the next 25 years with a significant transfer of wealth happening in the next 10. Is your family prepared?

 

What is wealth? Wealth is relative; there is no specific universal definition or amount. Generally, we focus on wealth because we wish to leave more to our

Read More

IRS to Allow Pass-through SALT Workaround

Posted on Thu, Nov 12, 2020

By: Jonathan S. Kandel, CPA and Clare Porreca, CPA, MT

 

On November 9, 2020, the IRS released Notice 2020-75 announcing proposed regulations will be issued confirming that state and local taxes imposed on and paid by a partnership or S Corporation will be 100% deductible by the entity, and thus not limited to the $10,000 limit on state and local tax (SALT) deductions.

 

Background

The Tax Cuts and Jobs Act (TCJA) limited the state and local tax deduction for individual taxpayers to $10,000 for tax years 2018 – 2025. Since the enactment of the TCJA, several states have tried to create various workarounds to the SALT cap, including converting state and local taxes to charitable

Read More

PPP Update #17 – Updated Guidance: New Application, “Owner” Clarification, New Strings for Nonpayroll Costs & Related Parties, and some FAQs

Posted on Wed, Nov 11, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates#1, #2#3#4#5#6#7,#8,#9,#10, #11, #12,#13,#14, #15, #16, #17

 

Since our last comprehensive Paycheck Protection Program (PPP) update, the Treasury and Small Business Administration (SBA) have continued to issue new guidance for the PPP. The continuous stream of new guidance caused most banks to delay opening their PPP forgiveness portals until recently. Now that forgiveness applications are being accepted by most banks, and as promised in our recent PPP Update #16, today we will address general

Read More

PPP Update #16 – Questionnaires for Loans Greater Than $2 Million

Posted on Fri, Nov 06, 2020

As guidance in this area is being released regularly, we recommend you read all of our blogs on this subject.  All the blogs in the Paycheck Protection Program series are here: Updates#1, #2#3#4#5#6#7,#8,#9,#10, #11, #12,#13,#14, #15, #16, #17

 

Let us take a break from the election and get back to our favorite (read: most confusing) stimulus, the Paycheck Protection Program (PPP). Over the next week, we will provide various updates that occurred since our last PPP blog update. Today, we will focus on an update from last week that provides insight into how the Small Business Administration (SBA) will review PPP loans of $2 million or more. If your PPP loan is $2 million or more,

Read More

Telecommuting - Payroll Issues for Pennsylvania Businesses and Employees

Posted on Fri, Oct 30, 2020

Clare Porreca, CPA, MT

 

Working from home has created a host of state and local tax issues that businesses cannot ignore. Pennsylvania’s numerous local tax jurisdictions create an extra layer of complexity. As pandemic-influenced telecommuting remains prevalent, Pennsylvania employers and employees should revisit their policies regarding PA local tax withholding.

 

PA Act 32 states employers must withhold the greater of the PA local income tax of the location in which the employee works or resides. When an employee temporarily changes work locations (defined as less than 90 days), the employer does not have to change the locality of the employee’s withholding. However, once an employee’s

Read More

Trump’s Chinese Bank Account Raises Questions for U.S. Taxpayers with Foreign Accounts

Posted on Wed, Oct 28, 2020

Last week's presidential debate and discussion surrounding President Trump's Chinese bank account conjured up many questions regarding reporting requirements for foreign accounts. Coincidentally, the U.S. Treasury's Financial Crimes Enforcement Network ("FinCEN") posted to its website on October 14, 2020, extending the deadline to report such bank accounts and briefly threw the accounting world into a frenzy. Here’s what happened…

 

On October 14, 2020, FinCEN announced taxpayers would have until December 31, 2020, to file reports for the 2019 tax year given the global pandemic and other extenuating circumstances during 2020. Two days later, after the extended deadline of October 15th had

Read More

Cash Flow Forecasting and Finding Liquidity During the Pandemic

Posted on Thu, Oct 22, 2020

As leaders across the world work continuously to combat the ongoing COVID-19 pandemic, so must business owners of all sizes, industries, and geographic locations. Throughout 2020, the business world and global economy has swiftly transitioned from a period of growth to that of great operational and informational uncertainty.

 

For many business owners and organizational leaders, cash flow forecasting is a tool used to understand cash flexibility, evaluate liquidity, and identify risks.

 

Cash flow models are ​useful in the current economic environment. Having a cash burn analysis allows businesses to understand worst-case-scenario outcomes and plan strategically. Some examples of ​what can

Read More

Tonight’s Presidential Debate – Listen for These Tax Topics

Posted on Tue, Sep 29, 2020

With the first presidential debate occurring tonight at 9:00 PM EST, many will watch and listen to the candidates’ plans for the next four years. The fourth of six scheduled 15-minute time segments will be dedicated to the economy. In preparation for this discussion we have prepared a high-level overview of the candidates’ tax proposals, and some important considerations around their potential implications.

 

Legislative proposals are typically brought forward by the president, while law is then generally dictated by Congress. Coming into this fall’s election cycle, the House is controlled by the Democrats and the Republicans need 20 seats to take control. The Senate is controlled by the

Read More