The SALT Cap and State Taxation of Pass-Through Entities

Among the many significant changes in the 2017 Tax Cut and Jobs Act (TCJA), individual taxpayers’ deductions for state and local taxes (SALT deductions) on federal Form 1040 Schedule A were capped at $10,000 ($5,000 for married taxpayers filing separately).  The “SALT cap” results in reduced itemized tax deductions for individual taxpayers, particularly impacting homeowners …

Tax Treatment of Unemployment Benefits

The federal American Rescue Plan Act signed by President Biden in March 2021 provides that up to $10,200 of state unemployment benefits received by individuals during 2020 are excluded from gross income. Taxpayers are eligible for the exclusion only if federal adjusted gross income is less than $150,000. The mid-March legislation created some initial confusion …

Internal Revenue Service Publishes Regulations Clarifying Business Meal and Entertainment Expenses

Although the 2017 Tax Cuts and Jobs Act (TCJA) suspended the 2% of AGI miscellaneous deductions for individuals beginning in 2018, certain taxpayers may still claim deductions for unreimbursed business expenses, including sole proprietors, certain government officials, Armed Forces reservists and partners in flow-through entities who are regarded as self-employed individuals. Such individuals who incur …

Year-End Tax Planning: Maximizing the Tax Benefits of Charitable Contributions Under the TCJA

Many charities feared that the 2017 Tax Cuts and Jobs Act (TCJA) would have an adverse impact on charitable giving during 2018 and after. The significant increase to the standard deduction available to most individuals means that more taxpayers do not itemize their deductions, including charitable contributions. In effect, “losing” the charitable tax deduction and …

IRS Issues New Form For Reporting Non-Deductible Fines and Penalties

Internal Revenue Code Section 162, as amended by the 2017 Tax Cuts and Jobs Act (TCJA), provides that no deduction is allowed for any amount paid to, or at the direction of, a governmental entity in relation to the violation of any law. A corresponding obligation to report the receipt or imposition of such “fines …