What’s in the Inflation Reduction Act part 2

A provision in the proposed Inflation Reduction Act would boost the payroll tax credit for increasing research activities. Currently, a qualified small business (QSB) may elect to take part of the research credit as a payroll tax credit against its employer FICA tax liability. A QSB must have gross receipts of less than $5 million […]

What’s in the Inflation Reduction Act

One provision of the proposed Inflation Reduction Act would close the “carried interest loophole.” Currently, partners aren’t taxed when a profit’s interest is issued, but when the income is realized by the partnership. At that point, the income usually is taxed at the maximum long-term capital gains rate of 23.8% (compared with a top income-tax […]

ACA’s penalty is decreasing in 2023

The Affordable Care Act’s (ACA’s) affordability percentage for employers to avoid a shared responsibility payment (penalty) is decreasing in 2023. The ACA’s employer-shared responsibility provision requires applicable large employers to offer minimum essential coverage that’s “affordable” and that provides “minimum value” to full-time employees or potentially make an employer-shared responsibility payment to the IRS. Health […]

IRS Funding proposed

A proposal to appropriate $80 billion over 10 years to the IRS is back on the table as part of the Inflation Reduction Act. (It was originally included in the Build Back Better bill.) The funds would be available to the IRS through Sept. 30, 2031, across four areas of the agency. First, nearly $3.2 […]

Can you spot a scammer?

Can you spot a fake IRS employee? Many people tremble at the thought of hearing from the IRS. That fear can make them vulnerable to scams that seek to steal their assets or identities. To combat IRS impersonator scams, the IRS has created a fact sheet explaining how it contacts taxpayers. The first contact is […]

Proposed Inflation Reduction Act

If the proposed Inflation Reduction Act is passed, domestic manufacturers could bear the brunt, warns one lawmaker. U.S. Senator Mike Crapo (R-ID), a member of the Senate Finance Committee, cited analysis by the Joint Committee on Taxation (JCT). While the JCT projects that only about 150 taxpayers annually will be subject to the 15% book […]

Hobby or Business?

Is your hobby actually a business? It’s an important question because although you must report hobby income on your tax return, hobby expenses aren’t currently deductible. In general, an activity is considered a business if you pursue it with continuity and regularity and your primary purpose is to generate income or profit. Some other factors […]

IRS Whistleblower Program

New IRS Whistleblower Program director John Hinman admits that his group needs the public’s help. Specifically, it needs “people with first-hand knowledge of non-compliance who are willing to share what they know with us so we can investigate it when warranted.” Whistleblowers can report their specific, timely and credible claims about individual and corporate tax […]

CHIPS Act

The U.S. Senate has passed legislation on semiconductor production and economic competitiveness, including an investment tax credit for manufacturing facilities and equipment. The Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act includes more than $52 billion for U.S. companies that make computer chips as well as a tax credit for investment in chip […]

Agreement on the Inflation Reduction Act

The Inflation Reduction Act has moved a step closer to being passed in the U.S. Senate. Sen. Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV) have agreed to a pared down package of provisions once part of the larger Build Back Better Act. Tax-wise, the bill would impose a 15% minimum tax on corporations with […]