New Tax Laws - Linkenheimer LLP CPAs & Advisors

Vehicle Expenses: Can Individual Taxpayers Deduct Them?

It’s not just businesses that can deduct vehicle-related expenses on their tax returns. Individuals also can deduct them in certain circumstances. Unfortunately, under current law, you may not be able to deduct as much as you could years ago.

For years prior to 2018, miles driven for business, moving, medical and charitable purposes were potentially deductible. For 2018 through 2025, business and moving miles are deductible only in much more limited circumstances. The changes were a result of the Tax Cuts and Jobs Act (TCJA), which could also affect your tax benefit from medical and charitable miles.

Fortunately, if you’re eligible to deduct driving costs, the IRS just increased the standard amounts for the second half of 2022 due to the high price of gas.

Current vs. past limits

Before 2018, if you were an employee, you potentially could deduct business mileage not reimbursed by your employer as a miscellaneous itemized deduction. But the deduction was subject to a 2% of adjusted gross income (AGI) floor, which meant that mileage was deductible only to the extent that your total miscellaneous itemized deductions for the year exceeded 2% of your AGI. However, for 2018 through 2025, you […]

By Linkenheimer LLP|2022-06-28T23:34:10+00:00June 28th, 2022|deduction, expensing, New Tax Laws, tcja|0 Comments

Thompson, LaMalfa Introduce Bipartisan Bill to Ensure Fire Victims Don’t Pay Taxes on PG&E Court-Ordered Trust Payments

Washington –

Today, Reps. Mike Thompson (CA-05) and Doug LaMalfa (CA-01) introduced bipartisan legislation to ensure that no fire survivors are taxed on the payments they received from the PG&E Fire Victims Trust. Following fires in 2015, 2017, and 2018, PG&E established a court-ordered trust of over $13 billion for survivors of these devastating events.

“I have heard from constituents across our community who are deeply, deeply concerned that they will face a tax burden upon receiving a payout from PG&E,” said Thompson. “This trust was set up to help people get back on their feet and recover after a destructive fire. They should not have to pay taxes on these payouts. I am proud to introduce this bill alongside Rep. LaMalfa to help our constituents receive the money they are owed, and will continue working to ensure survivors have the resources they need to recover from these tragedies.”

“Fire victims have lost homes, belongings, and for some, even their loved ones. We should not ask survivors to pay federal taxes on compensation that they will use to rebuild their lives. And we certainly should not be asking them to pay taxes on […]

By Linkenheimer LLP|2022-04-01T22:47:30+00:00April 1st, 2022|fire, Fire Relief Info, New Tax Laws|0 Comments

California Governor Signs Two Major Bills: SB 113 and SB 114

Today, California Governor Gavin Newsom signed SB 113, which expands the passthrough entity elective tax benefits by:

Repealing the tentative minimum tax limitation on the Passthrough Entity Elective Tax Credit;
Allowing partnerships/S corporations/LLCs with owners that are partnerships to make the election (although the tax can’t be paid on behalf of the partnership owner);
Allowing SMLLCs that are passthrough entity owners to claim the Passthrough Entity Elective Tax Credit (although SMLLCs are still prohibited from making the election themselves); and
Changing the credit ordering rules related to the Passthrough Entity Elective Tax Credit to increase the benefit for taxpayers that claim the Other State Tax Credit (beginning with the 2022 tax year).

Except as noted, these changes will apply to the 2021 tax year. Yesterday, we posted more info on SB 113, which you can read here.

SB 113 also:

Fully conforms to the federal exclusion of Restaurant Revitalization Grants, retroactive to the 2020 tax year;
Partially conforms to the federal exclusion of Shuttered Venue Operator Grants, retroactive to the beginning of the 2019 tax year; and
Repeals the $5 million business credit limitation and NOL suspension for higher […]

By Linkenheimer LLP|2022-02-09T20:03:46+00:00February 9th, 2022|ca, CA tax, california, New Tax Laws|0 Comments

California Tax Law Changes Await Governor’s Signature

Governor Newsom is expected to sign SB 113 soon, which contains several tax-related changes that impact 2021 tax returns and the current filing season.

Expansion of the Pass-through Entity (PTE) Tax for Additional Relief from State and Local Tax (SALT) Deduction Limits In 2021, California established an elective PTE tax framework to allow certain California taxpayers to pay their California personal income tax in a way that provides relief from the current $10,000 federal limit on individual SALT deductions. While implementing the new framework, limitations were identified that would prevent taxpayers from realizing the full intended benefit of the PTE tax and subsequent credit. SB 113 address some of these issues:

For taxable years on or after Jan. 1, 2021:
- Clarification that a taxpayer can apply the full PTE credit against their California tax liability as originally intended without limitation due to tentative minimum tax.
- Expansion of eligible taxpayers to include tiered partnerships and those that own their share of a business through a disregarded entity, such as a single-member LLC.
- Clarify that PTE tax provisions can apply to guaranteed payments as part of the distributive share of net income from an entity.

[…]

By Linkenheimer LLP|2022-02-08T23:50:01+00:00February 8th, 2022|CA tax, california, New Tax Laws, ppp|0 Comments

Smooth Sailing: Tips To Speed Processing And Avoid Hassles This Tax Season

The IRS began accepting 2021 individual tax returns on January 24. If you haven’t prepared yet for tax season, here are three quick tips to help speed processing and avoid hassles.

Tip 1. Contact us soon for an appointment to prepare your tax return.

Tip 2. Gather all documents needed to prepare an accurate return. This includes W-2 and 1099 forms. In addition, you may have received statements or letters in connection with Economic Impact Payments (EIPs) or advance Child Tax Credit (CTC) payments.

Letter 6419, 2021 Total Advance Child Tax Credit Payments, tells taxpayers who received CTC payments how much they received. Since the advance payments represented about one-half of the total credit, taxpayers who received CTC payments need to file a return to collect the rest of the credit. Letter 6475, Your Third Economic Impact Payment, tells taxpayers who received an EIP in 2021 the amount of that payment. Taxpayers […]

By Linkenheimer LLP|2022-01-28T21:03:23+00:00January 28th, 2022|New Tax Laws, tax planning, tax time|0 Comments