Your search for “” AND “Client Alerts”
2020 Employee Benefit Plan and Transportation Limits
The Internal Revenue Service (“IRS”) recently announced 2020 cost-of-living adjustments for retirement and health and welfare plans and transportation programs. The majority of limits increased modestly for 2020, while a few dollar limits, such as the IRA contribution limit, will remain the same. Notable increases in 2020 are the defined benefit and contribution plan limits, elective deferral limits and age 50 catch-up contributions.
The New Landscape for Business Year-End Tax Planning
For many businesses, the first filing season after the 2017 tax law changes was a time of uncertainty. Many businesses struggled to ascertain the impact on their bottom line from the law’s sweeping changes. With the next filing season on the horizon, there are lessons learned that you can incorporate into your year-end tax planning.
It’s Not Too Late to Trim Your 2019 Tax Bill
Fall is in the air and that means it is time to turn your attention to year-end tax planning. While several strategies emerged during the first tax filing season under the Tax Cuts and Jobs Act (TCJA), 2019 and subsequent years bring potential twists that must be considered, too. Let’s take a closer look at year-end tax planning strategies that can reduce your 2019 income tax liability.
The U.S. Department of Labor Finalizes the New Overtime Rule
The U.S. Department of Labor (DOL) has released the finalized rule on overtime exemptions for white-collar workers under the Fair Labor Standards Act. The rule updates the standard salary levels for the first time since 2004. While it is expected to expand the pool of non-exempt workers by more than one million, it is also more favorable to employers than a rule proposed by the Obama administration in 2016. That rule would have expanded the pool by more than four million but was blocked by a federal district court judge.
IRS Provides Final QBI Real Estate Safe Harbor Rules
In February of this year, the IRS published a proposed safe harbor for owners of certain rental real estate interests who wanted to take advantage of the qualified business income (QBI) deduction (Notice 2017-19). The IRS has now released Revenue Procedure 2019-38, which is its final guidance on the safe harbor.
Additional Guidance on New Bonus Depreciation: Final and Proposed Regulations
Final regulations and additional proposed regulations were issued for the first-year 100% bonus depreciation deduction. The 2017 tax law expanded the deduction to 100% for qualified property placed in service before the end of 2022. Generally, the bonus then phases out each subsequent year by 20%, until it sunsets in 2027.
Illinois Exempts Transportation and Parking Benefits From Taxation for Not-for-Profit Organizations
Last month, Illinois Governor J.B. Pritzker signed SB1257 into law enacting changes, in part, to the state’s Income Tax Act. A portion of the bill was aimed specifically at the state’s numerous not-for-profit organizations in an attempt to relieve additional burdens placed on them as a result of the Federal Tax Cuts & Jobs Act of 2017 (TCJA). For tax years beginning on or after January 1, 2019, organizations subject to federal unrelated business income (UBI) taxation on expenses paid for certain qualified transportation fringes will no longer also be subject to taxation in Illinois on these expenses.
Time is Running Out on Restating or Fixing Your 403(b) Retirement Plan
Starting in 2017, the IRS began issuing approval letters to document providers who are working with plan sponsors to get their plan documents restated. Plan sponsors of 403(b) plans have until March 31, 2020 to restate their plan documents by adopting an IRS pre-approved 403(b) plan. Individually-designed plans should be amended to correct defects, too, but without receiving a determination letter.
DOL Expands Retirement Plan Options for Smaller Businesses
The U.S. Department of Labor (DOL) has released a final rule which should make it easier for smaller businesses to provide retirement plans to their employees. According to the DOL, the rule will enable more small and midsize unrelated businesses to join forces in multiple employer plans (MEPs) that provide their employees a defined contribution plan such as a 401(k) plan or a SIMPLE IRA plan. Certain self-employed individuals also can participate in MEPs.
Congress Acts to Reform the IRS, Enhance Taxpayer Protections
Congress has passed and President Trump is expected to sign into law a broad package of reforms aimed at the IRS. The Taxpayer First Act contains several new protections for taxpayers along with provisions intended to improve the IRS’s customer service.