The IRS recently issued guidance on tax withholding for the coming year. The redesign of the W-4 has been tabled until 2020 after the proposed form met with heavy criticism from groups like the American Society of CPAs. The W-4 for 2019 will be essentially the same as the 2018 with the exception of changes to the “withholding allowance” terminology used in the Tax Cuts and Jobs Act (TCJA.)
Ohio Tax Commissioner Joe Testa has announced that effective January 1, 2019, there will be changes to the state’s income tax withholding tables. These changes will be the first to the state’s withholding amounts since 2015.
The Tax Cuts and Jobs Act (TCJA) is the largest change to the tax code in over 30 years. To help you understand the changes to the tax code and how they may affect your individual federal return, we've created a helpful chart (below.)
10 Things You Should Be Doing NOW to Prepare for Tax Season
The Tax Cut and Jobs Act (TCJA) has brought about the largest change in the tax code in over 30 years. The changes will have a much greater impact on the coming tax season than most realize, so we recommend you take a proactive approach to tax preparation this year.
Current Law:
The Tax Cuts and Jobs Act of 2017 limits individual taxpayer's state and local tax (SALT), itemized deduction to $10,000 (including real estate taxes). The previous law allowed an unlimited deduction. This change may be detrimental to many individual taxpayers who relied heavily on these deductions in the past.
State Work-Arounds:
Some states have considered "work-arounds" to combat this limitation. Select states (California, Connecticut, Illinois, New York and New Jersey, thus far) have created state
On June 21, the Supreme Court handed down a landmark decision in South Dakota vs. Wayfair (“Wayfair”). The fallout of this decision will significantly change the way online vendors handle sales and use (“S&U”) tax for out-of-state consumers going forward. It will, therefore, also affect online consumers. Are you impacted!?
When couples divorce, financial negotiations often involve alimony. The tax rules regarding alimony were dramatically changed by the Tax Cuts and Jobs Act (TCJA) of 2017, but existing agreements have been grandfathered. In addition, the old rules remain in effect for divorce and separation agreements executed during 2018. Next year, the rules will change, and the roles will be reversed.
Under divorce or separation agreements executed in 2018, and for many years in the past, alimony payments have been tax deductible. Moreover, these deductions reduce adjusted gross income, so they may have benefits elsewhere on a tax return. While the spouse or former spouse paying the alimony gets a tax deduction, the recipient reports alimony as taxable income.
Shifting into reverse
Beginning with agreements executed in 2019, there will be no tax deduction for alimony. As an offset, alimony recipients will not include the payments in income.
By Howard J. Kass, CPA, CGMA, AEP®
As often as employers are maligned, there are times where they try to do the right thing for their employees. To be fair, many times, an employer may take an action or incur an expense that benefits its employees, knowing that the employer will benefit by a tax deduction for incurring an expense. In some cases, Congress encourages such behavior by explicitly permitting favorable tax treatment for certain programs.
One such case was a set of fringe benefits known as the “qualified transportation fringe” benefits that, in fact, received a double-barreled tax benefit for years, by virtue of Internal Revenue Code Section (IRC) 132(f)(5)(C). Under that section, employers were allowed to take a deduction for, among other things, qualified parking fringe benefits that they provided to their employees. What, exactly, was a qualified parking fringe benefit? Under IRC 132(f)(5)(C), “qualified parking” meant parking provided to an employee on or near the business premises of the employer, or on or near a location from which the employee commutes to work by transportation described in Code Sec. 132(f)(5)(A) (relating to “transit passes”), in a commuter highway vehicle, or by carpool.
Tax season is prime time for scammers and cyber criminals. Beyond identity theft, which is seemingly quite commonplace, tax scams have the dubious distinction of rising to the top of the Better Business Bureau's list of scams in 2016.
According to the Better Business Bureau Scam Tracker, the top ten list includes:
Did you receive an Ohio Individual Income Tax Failure to File notice (ITDQ0009) from the Ohio Department of Taxation (ODT) advising you that they did not receive an Ohio Individual Income tax return?
